The US dollar will be supported for longer than Janet Yellen's words about the need for further interest rates, as the euro will continue to be under pressure because of political uncertainty in Germany and Spain.
The Dollar Index is currently at 93.26 or the highest in a month. The index is at key levels, making a diagonal breakthrough and is in a horizontal resistance zone. If it succeeds in overcoming it, the positive sentiment in the green currency is likely to increase.
Fed chairman Janet Yellen said on Tuesday that the Federal Reserve should continue the gradual increase in interest rates, despite high uncertainty about the path of inflation. The comments suggest that the latest indications of inflation are not particularly relevant to the Fed. The focus of the central bank is not to delay too much the interest rate so that it does not have to happen in the future too abruptly.
Here are the main movements following Yelan's comments
- USD/JPY rebounded from 111.50 to 112.33
- The EUR/USD dropped to $ 1.1745 from $ 1.1800
- GBP/USD declined to 1.3360, with the impulse continuing to grow.
The euro has grown by more than 10% since the beginning of the year, but a lot of problems await it in the future, with political uncertainties in Germany and Catalonia, where the authorities are doing their best to thwart the local referendum to separate the region as an independent state .
Most market participants believe that the euro will be able to stabilize, but at the beginning of next year when it comes to how the ECB will cut the QE program and what government will govern Germany.
Source: Bloomberg Pro Terminal
Jr Trader Petar Milanov
25 Canada Square, Level 33, office 50, Canary Wharf London, E14 5LQ +44 20 3608 6256
World Financial Markets - 0700 17 600 Varchev Exchange - 0700 115 44
Varchev Finance Ltd is registered in the FCA (FINANCIAL CONDUCT AUTHORITY) with a passport in the United Kingdom: FCA, United Kingdom - registration number: 494 045, which allows provision of financial services in the United Kingdom.
Varchev Finance Ltd strictly comply with the statutes of the European directive MiFID (Markets in Financial Instruments). targeting increased efficiency, transparency and uniformity of financial instruments.
Varchev Finance Ltd is authorized and regulated by the Financial Supervision Commission - Sofia, Bulgaria: License number RG-03-02-05 / 15.03.2006
The information on this site is not intended for distribution or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 63,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.