Alfa-Forex: EUR / USD – officials from the Federal Reserve slow down the growth of the dollar

12 April 2021

On the world currency market, there has been a recovery in the euro quotes against the dollar from the March lows (1.1700) towards the psychological level of 1.2000. Positive statistics from the United States ceases to support the American currency due to statements by officials from the Fed: FED head Jerome Powell, in his speech to the IMF, again tried to convince investors of short-term surges in inflationary risks, and said that a soft monetary exchange rate would continue until 2023. The regulator notes signs of economic recovery, which will allow for a long time to maintain the zero level of rates while maintaining core inflation in the range of 2-2.5%.

This Tuesday, the focus of investors will be on the March statistics on the US consumer price index. According to experts’ forecasts, the growth of the CPI indicator will amount to 0.1% to 0.5%, and in annual terms a sharp surge is expected from 1.7% to 2.5%. Therefore, market participants can get more weighty arguments for the resumption of dollar purchases, when the corrective growth of the euro will win back.

The EUR / USD pair is correcting towards the 1.2000 level and temporarily suspended the bearish trend. The support for the market is the area 1.1700-1.1800.

RUBLE – geopolitical factors keep investors in suspense

The national currency remains under pressure due to expectations of new sanctions and ongoing geopolitical tensions. The index of Russian government bonds updated semi-annual lows, falling to 143.80 points, the quotes of the dollar and the euro for the first time since December last year consolidated above the levels of 76.50 and 91 rubles, respectively. At the same time, the market ignores the growth of business activity in March (the PMI Services index rose from 52.2 to 55.8 points) and expensive oil (a barrel of Brent continues to trade above $ 63). Over the week of April 8, the reserves of the Bank of Russia again showed negative dynamics, having decreased by $ 2.9 billion. The regulator takes into account external risks and, in order to avoid a collapse of the ruble, is likely to suspend purchases of foreign currency as part of the budget rule until the influence of geopolitical factors weakened.

The USD / RUB pair has consolidated above 76.50 rubles and retains the chances of continued growth in the direction of 80 rubles per dollar.

The EUR / RUB pair is trading above 91 rubles and is able to continue moving to the upper border of the corridor – 94 rubles per euro.

This information is not investment advice.

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