Anna Zaitseva, analyst, FINAM Group
On Wednesday, April 7, the US dollar is showing neutral dynamics against major currencies. As of 11:40 Moscow time, the EUR / USD rate is growing by 0.06% and is at around 1.18760, while the DXY dollar index adds 0.01%, trading at 92.355. A day earlier, the main currency pair rose 0.48% to 1.18709, while the dollar index fell 0.27% to 92.348.
The American currency weakened its positions against the background of the decline in the yields of US Treasury bonds for three consecutive days. Thus, the yield on 10-year securities dropped to 1.637%, and on 30-year securities – to 2.302%. This may be partly due to lower expectations that the Fed will be forced to raise the interest rate earlier than planned due to rising inflation. At the same time, market participants are still expecting an acceleration of inflation this year as a result of large-scale injections of money into the economy, in connection with which the growth of UST yields may continue in the near future.
The increase in demand for conventionally risky currencies was also facilitated by the positive forecasts of the IMF on the growth rates of the world economy. The spring session of the IMF and the World Bank began yesterday, during which the Fund presented its forecast for global GDP growth in 2021 at 6%, which may be the highest increase since 1970. As one of the key reasons for this growth, the IMF singled out measures of fiscal and monetary stimulus in leading countries, in particular in the United States.
In terms of macroeconomic statistics, data on the unemployment rate in the eurozone became known yesterday. At the end of February, the value of the indicator did not change and amounted to 8.3%, while analysts expected a decrease to 8.1%.
In the States, February data on the number of open vacancies in the labor market from JOLTs was released. The indicator rose to 7.367 million from 7.099 million in January, which was higher than the consensus forecast of 6.995 million.It is also worth noting the data on the economic optimism index IBD / TIPP: in April, the indicator increased by 1 percentage point, to 56.4 point, which was the maximum result since February 2020.
Today in Germany and the eurozone were released the final March data on the PMIs in the services sector from Markit. In Germany, the final estimate was raised by 0.7 p.p. to 51.5 points (the maximum since November 2020), and in the eurozone it was also revised upward by 0.8 p.p. to 49.6 points.
Further during the day, it will be necessary to follow the publication in the States of data on exports, imports and trade balance. In addition, today the heads of the Federal Reserve Banks of Chicago and Richmond are expected to speak, as well as the publication of the minutes of the previous meeting of the Federal Reserve Committee on Open Markets.
The EUR / USD rate stopped at the approach to the 1.1900 level, while the stochastic lines entered the overbought zone. In this regard, the potential for further growth in quotations looks limited in the short term.
This information is not investment advice.