Quotes of the euro against the dollar on the market so far cannot rise above the psychological level of 1.2000 and maintain a downward trend in the direction of 1.1800. Investors do not find fundamental reasons for opening deals in euros, and the speech of the head of the Federal Reserve, Jerome Powell, last Wednesday attracted buyers of the American currency to the market after its short-term weakening. The regulator tried in every possible way to convince the players of the intention to adhere to a soft monetary policy until the end of 2023, but commodity markets warmed up by monetary stimuli give clear signals of a rapid rise in inflation expectations. In this regard, the achievement of the US inflation target of 2-2.5% (the current level is 1.7%) may occur already this year, and the FED will have to react by removing cheap dollar liquidity from the financial markets. Europe is noticeably lagging behind the United States in terms of economic recovery: the consumer price index in February was 0.9% on an annualized basis, the unseasonally adjusted trade balance in January fell from 29.4 euros to 6.3 billion euros. Against this background, participants in the foreign exchange market will likely continue to build up their dollar positions as positive macroeconomic statistics come from overseas.
The EUR / USD pair is consolidating in the range of 1.1850-1.2000 and maintains the mood to advance to the support area of 1.1600-1.1800.
RUBLE – the risk of sanctions returns volatility to the market
The national currency is again volatile due to the increasing risks of introducing new restrictions against Russia. Tough statements by US President Biden led to an increase in the premium in the USD / RUB and EUR / RUB quotes and put pressure on the Russian government bond market: the RGBI index fell to 145.45 points (minimum since March 2020). This means that foreign investors are leaving government instruments. debt. The Bank of Russia, taking into account foreign and domestic inflationary factors, logically raised the key rate by 25 basis points to 4.5% last Friday. However, this is still not enough to cover the current inflation rate of 5.7%. Nevertheless, the regulator made it clear that in case of accelerating inflation, it is ready to tighten monetary policy. This week, the EU may announce new sanctions, which will negatively affect the ruble and increase fluctuations in quotations.
The USD / RUB pair has formed a sharp rebound from the lower border of the trading corridor 72.70-76.60 rubles and is heading to the area of 75 rubles – 76.50 rubles per dollar.
The EUR / RUB pair is moving towards the resistance area of 89.20 rubles – 91 rubles, completing an active phase of decline at 86.50 rubles per euro.
This information is not investment advice.
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