FINAM FOREX: Dollar Index Consolidates Near Three-Week Lows


13 April 2021

Anna Zaitseva, analyst, FINAM Group

On Tuesday, April 13, the US dollar strengthens slightly against the major world currencies. As of 11:59 Moscow time, the EUR / USD rate is decreasing by 0.08% and is at the level of 1.19010, while the DXY dollar index is growing by 0.02%, trading at 92.160. At the end of Monday, the main currency pair rose by 0.12% to 1.19121, while the DXY indicator showed almost zero change, closing at 92.144.

The dollar index is consolidating near its three-week lows ahead of the release of inflation data in the US, which could seriously affect the inflation expectations of market participants and, as a result, the yield of US Treasuries. It should be said that the consensus forecast for inflation in March is 2.5% (y / y) versus 1.7% (y / y) in February. Against this background, the yield on US government bonds is growing today: the yield on 5-year securities is 0.907%, 10-year securities – 1.691%, and 30-year securities – 2.35%.

Among the events of yesterday, one can note the speech of the head of the Federal Reserve Bank of Boston, Eric Rosengren. According to him, the American economy will demonstrate significant growth this year, largely due to the adaptive monetary and fiscal policies implemented in the country. At the same time, as previously noted by the head of the Fed Jerome Powell, the regulator is ready to adhere to the soft course of the monetary policy for a long time and does not plan to wind down stimulus measures until the economy fully recovers after the crisis, as many market participants had recently assumed.

In terms of macroeconomic statistics, data on retail sales were released in the eurozone yesterday. At the end of February, the indicator increased by 3.0% (mom) against a decrease of 5.2% (mom) a month earlier, exceeding the consensus forecast of + 1.5% (mom).

In the United States on Monday came the report on the execution of the federal budget for March. According to the data presented, the budget deficit amounted to $ 660 billion compared to a deficit of $ 311 billion a month earlier, while analysts expected a result of -658 billion dollars.

Today in Germany came the data on the wholesale price index: in March, the indicator increased by 4.4% (yoy) compared with an increase of 2.3% (yoy) in February, which was the largest increase since April 2017. …

Further during the day, one should pay attention to the publication in the eurozone and Germany of the April data on the ZEW economic sentiment indices, and in the US, as noted above, the inflation data. In addition, the heads of the Federal Reserve Banks of Kansas, San Francisco, Philadelphia and Atlanta are expected to speak today.

EUR / USD is holding close to 1.1900 below the 50-day moving average line. Stochastic lines are in the overbought zone, which indicates a limited potential for further growth in quotations and the likelihood of their decline / consolidation in the short term.

This information is not investment advice.

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