Anna Zaitseva, analyst, FINAM Group
On Friday, April 9, the US dollar is strengthening against major world currencies. As of 11:43 Moscow time, the EUR / USD rate is down 0.23% to 1.18862, while the DXY dollar index adds 0.26%, trading at 92.305. As a result of the previous session, the main currency pair rose by 0.38% to 1.19145, while the dollar index decreased by 0.44% to 92.069.
The weakening of the American currency slowed down after yesterday’s speech by the head of the FRS Jerome Powell in the framework of the spring session of the IMF. According to him, at the moment the main risk for the global economy is the uneven vaccination of people against coronavirus infection in different countries. Powell believes that business recovery will be incomplete and uneven until the pandemic is fully under control. In these conditions, the Fed considers it necessary to maintain stimulus measures for the American economy until inflation and unemployment indicators reach their target values. At the same time, Powell noted that new waves of morbidity will no longer have such a significant impact on the economy as it was at the beginning of the pandemic.
As for the situation in the sovereign debt market, yields on US Treasuries are recovering in Friday trading: on 10-year bonds, the yield is 1.667%, and on 30-year bonds – 2.344%, compared with yesterday’s close at 1.626% and 2.316%, respectively. Yields on German government bonds are also growing, but at a slower pace, which contributes to the strengthening of the dollar.
In terms of macroeconomic statistics, the US yesterday released weekly data on the number of initial applications for unemployment benefits. At the end of the previous week, the value of the indicator was 744 thousand compared to the previous result of 728 thousand, while analysts expected a decrease to 680 thousand.
In Germany, industrial production data were released today. At the end of February, the indicator decreased by 1.6% (MoM) compared with a 2% (MoM) decline in January, which turned out to be significantly worse than the consensus forecast of + 1.5% MoM.
You can also note the data on the trade balance of Germany: in February, the balance was at the level of 18.1 billion euros, which was the best result over the past four months.
Further during the day, the publication is expected on the producer price index and the volume of inventories in wholesale warehouses in the United States.
The EUR / USD rate is testing the 1.1900 mark, while the stochastic lines, being in the overbought zone, are turning down. In this regard, the potential for further growth looks limited, and the likelihood of a decline or consolidation of quotations at the current levels increases.
This information is not investment advice.