Although the macroeconomic calendar was completely empty, market participants were not bored. As soon as it became known that China was introducing retaliatory duties on goods from the United States with a total of $60 billion, investors began to play against that same dollar. Fears were fueled by rumors that the Celestial Empire could stop purchases of US government debt, as well as, reduce energy purchases from the United States. However, these are just rumors and China is never the first to take drastic steps, so rather it's like a warning to the White House that they say, if Donald Trump raises the duties on the rest of Chinese imports, which is about $300 billion, then the response will be no less difficult. At the same time, the dollar began to grow almost instantly and it was able to strengthen well by the end of the day. Surprisingly, the growth of the dollar coincided with the speeches of representatives of the Federal Reserve System. In particular, attention was attracted to the words of the head of the Federal Reserve Bank of Boston, Eric Rosengren. After all, the Federal Reserve has long been talking about the risks to the economy, which bears the aggravation of trade disputes with China. Hence, it is obvious that in the event of an increase in confrontation, the regulator can go to mitigate monetary policy as said exactly by Mr. Rosengren. True, he added that he did not see the need for this since the long-term consequences are still unclear. In other words, while the disputes continue and the exchange of mutual increase in customs duties continues, the Federal Reserve System will not take any action. Nonetheless, the Federal Reserve is responsible for the second economy of the world and its influence on financial markets is difficult to imagine. It cannot afford to be guided by momentary fears. Hence, the Federal Reserve System will not change its current course while Washington and Beijing are exchanging jabs and pricks.
To be honest, if you look at the macroeconomic calendar, neither the single European currency nor the pound today has any reason to grow. In the UK, there are data on the labor market. Although the unemployment rate should remain unchanged and the number of applications for unemployment benefits should be reduced from 28.3 thousand to 24.2 thousand, the situation with wages is disturbing. It is predicted that the average wage growth rate may slow down from 3.4% to 3.3%. Moreover, the average wage growth rate, taking into account bonuses, which means overtime work, should also slow down from 3.5% to 3.4%. It is obvious that investors should wait for a decline in consumer activity in the form of a slowdown in retail sales and a decrease in lending, which reduces the potential return on investment. Sometimes it can cast doubt on the very payback of these very investments. If you look at Europe, the picture is no better since industrial production data should show a deepening decline from -0.3% to -0.8%. True, yesterday they predicted an acceleration of the decline rates to -2.1%. But it does not get any easier.
The euro/dollar currency pair gradually draws a downward movement but still within the limits of an earlier stagnation. It is likely to assume that in case of price fixing lower than 1.1220, it is possible to consider a move to 1.1200 - 1.1180 as the first points.
The pound/dollar currency pair showed a sharper downward movement, overcoming the psychological level of 1.3000, which previously held the quote. It is likely to assume that the downward interest will continue headed to the values of 1.2920 - 1.2880.
