Political Row and the Fed's Position Hit the US Dollar

Yesterday, the US dollar sharply weakened against the majors. Pressure on the American currency was caused by another political scandal in the White House. President of the United States Donald Trump dismissed two advisory councils, which consisted mainly of businessmen. The Fed's protocol indicated that the Central Bank was concerned about the low level of inflation in the country. It may take additional time for the indicator to reach the target level of 2% per annum. Some representatives of the Fed believe that you should not rush to raise the range of key interest rates. Additional pressure on the US dollar is also provided by weak statistics on the real estate market.

The growth of the single currency was modest. Yesterday there was information that ECB President Mario Draghi would not discuss possible changes in the monetary policy of the Central Bank at the Fed's conference in Jackson Hole, which is to be held on August 25. The issue of reducing the financial incentive program can be postponed until September.

The oil quotes closed the trading session in the negative zone. The US Energy Information Administration published a mixed report on oil products stocks.

Market Indicators

Yesterday, the major US stock indexes rose slightly. SPY (SPDR S&P 500 ETF) closed at $246.94 (+0.17%).

The 10-year US government bonds yield is at the level of 2.22-2.24%.

The dollar index (#DX) closed in the negative zone (-0.37%).

Today we recommend paying attention to the following events:

  • – A report on retail sales in the UK at 11:30 (GMT+3:00);
  • – Data on inflation in the Eurozone at 12:00 (GMT+3:00);
  • – The index of production activity from the Federal Reserve Bank of Philadelphia at 15:30 (GMT+3:00).

by JustForex, 2017.08.17

We advise you to get acquainted with the daily forecasts for the major currency pairs.

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.