FINAM FOREX: Fed officials are optimistic about the future


13 January 2021

Anna Zaitseva, analyst, FINAM Group

On Wednesday, January 13, EUR / USD is neutral at 1.2210 after gaining 0.44% the day before. The DXY dollar index is down 0.09% at 89.987. A day earlier, the DXY indicator dropped 0.42% to 90.064.

On Tuesday, positive sentiments prevailed on world markets again, which was also supported by statements by the Federal Reserve officials. Thus, the head of the Federal Reserve Bank of Cleveland, Loretta Meister, confirmed her earlier expectations that in the second half of 2021 the effect of the previously undertaken monetary and fiscal measures to stimulate the economy will fully manifest, and GDP will show significant growth. At the same time, she noted that the emergence of effective vaccines against the coronavirus, as well as a faster recovery last year, testify to the resilience of the American economy to the crisis. At the same time, Meister stressed that the economic system’s need for fiscal and monetary support still remains, and confirmed the regulator’s readiness to take appropriate response measures.

Also noteworthy is the speech of the head of the Federal Reserve Bank of Kansas City Esther George, in which she expressed optimism about the prospects for the American economy in the coming year. At the same time, George did not rule out that inflation could indeed reach the target level of 2.0% faster than previously expected, although this is not on the agenda in the near future. At the same time, the head of the Federal Reserve Bank noted that the main risk for the US economy at the moment is possible unforeseen delays in the distribution of vaccines against Covid-19, which could slow down the pace of economic recovery.

Regarding macroeconomic statistics, no indicators for the euro zone were published yesterday, while the US released data on the economic optimism index from IBD / TIPP. Thus, in January, the indicator increased by 1.1 percentage points to 50.1 points, reaching the maximum value in the last three months.

Also in the States, data on the number of open vacancies in the labor market from JOLTs became known. In November, the value of the indicator was 6.527 million, compared with 6.632 million a month earlier, moving away from its pre-crisis levels of 7 million.

Today we should pay attention to the publication in the eurozone of data on industrial production for November, and in the US – on December inflation. In addition, the head of the ECB Christine Lagarde and a number of FRS representatives will speak on Wednesday.

The EUR / USD rate held above 1.2150 and turned up. Stochastic lines are located near the oversold zone in a favorable position for buying, which speaks in favor of growth for the instrument in the short term.

This information is not investment advice.

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