FINAM FOREX: Change of tone in the statements of the FRS representatives supported the US currency


27 May 2021

Anna Zaitseva, analyst, FINAM Group

On Thursday, May 27, the US dollar is trading near yesterday’s close after a noticeable strengthening the day before. As of 11:52 Moscow time, the EUR / USD rate is growing by 0.03% and is at around 1.21960, while the DXY dollar index is down 0.02% and is trading at the level of 89.745. At the end of yesterday’s trading session, the main currency pair fell 0.50% to 1.21915, while the DXY indicator rose 0.45% to close above 90.00.

The change in sentiment in the currency markets was facilitated by yesterday’s statements by the vice president of the Federal Reserve for oversight, Randall Quarles, that in the event of a faster recovery of the American economy, the Fed may consider at the next meetings the issue of reducing the pace of buying assets from the market.

It is worth saying that the previous day, Fed Vice President Richard Clarida expressed similar assessments. Of course, the beginning of the discussion of the issue of curtailing stimulus measures does not mean real action in this direction, however, investors perceived this signal from the regulator as an excuse to take profits on short positions in the dollar.

Against this backdrop, the yields on 10-year US Treasury bonds also turned up after four days of decline and are now at 1.589%.

From the indicators of macroeconomic statistics yesterday in France, the May data on the consumer confidence index became known. Thus, the indicator increased by 2 pp to 97 points, in line with the consensus forecast.

A similar indicator was published in Germany today. The June value of the index was -7 points, which is higher than the previous result of -8.6 points, but worse than analysts’ expectations of -5.2 points.

Further during the day, the head of the Bundesbank Jens Weidmann and a number of representatives of the ECB are expected to speak. In addition, today it will be important to follow the publication in the United States of data on orders for durable goods, GDP for I quarter, initial claims for unemployment benefits and the number of pending transactions in the housing market.

The EUR / USD rate is consolidating near the 1.2250 mark, while the stochastic lines are at the border of the overbought zone, which indicates limited upside potential and the likelihood of correction / consolidation for the instrument in the short term.

This information is not investment advice.

Libertex [CPS] WW

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