Market Review for the week from 4 to 8 March

Dollar again strengthened its position in the period from 4 to 8 March. The index of the dollar USDX, is its relation to a basket of six major rivals, added 0.5% and reached 82.74. Macroeconomic data on the labor market of the United States has become the main driver of this growth. In February, the world’s largest economy added 232,000 new jobs (forecast 158 ​​thousand), which was sufficient to fully compensate for the losses accumulated from Monday to Thursday.

The single European currency is intended to intensify after the ECB did not lower interest rates, but also left unchanged its forecast for inflation. Evaluation on the prospects of the euro zone economy is also not corrected. The EUR/USD after the statements, moved up and reached 1.3120. However, after the release of positive data on the labor market from the U.S. on Friday, March 8, the dollar began to strengthen again. Euro surrendered all their profits and late afternoon tested the strength of last week’s lows of 1.2980.

The GBP/USD failed to consolidate its position after the Monetary Policy Committee of the Bank of England left unchanged the program of quantitative easing. Building on the recent statements of its head Mervyn King and negative macro-economic statistics, many participants expect further easing, but because the regulator’s decision to leave everything as it was played for the benefit of «British». However, after testing the resistance of 1.5080, the pair GBP/USD retraced back to around 1.50, breaking it after the release of data on the labor market in the U.S.. At the close of the week, she was quoted at 1.4950, down from its 0.3% results.

Marked increase in the Australian dollar after the Reserve Bank has confirmed its willingness to take a break in the cycle to reduce the key rate by real actions. On Tuesday, March 5 following his regular meeting knob left it unchanged at 3.00%. At increasing GDP growth rate and increasing the volume of exports, as well as inflation, very close to the target level, further easing in the foreseeable future looks uncertain. On this background, the AUD / USD has added 0.6%.

The Bank of Japan in the period and held its last meeting under Maasaki Shirakawa. The regulator did not go on further easing, citing signs of economic improvement. However, with the advent of Haruhiko Kuroda position of easing monetary policy will be strengthened. On Friday it was reported that Shirakawa leaves office without waiting for March 19. Accordingly, the Japanese yen continued to weaken, despite the positive news for her. USD/JPY is quoted before closing at 96.10.

Forecast for the week, 11 — 15 March

The main event of the week that may have an impact on the dollar, will be the data on consumer price inflation, which will be published on Friday, March 15 at 16:30 GMT. Inflation is now, in fact, the only reason that can be rolled up a program of quantitative easing, but it is within the target and does not cause concern at the Fed. There is no reason to believe that the situation could change dramatically in February and be reflected in this report. We believe that the reaction to the release of the data will be limited.

However, the U.S. currency has recently strengthened along with the stock markets, and therefore good figures on retail sales (Wednesday 13 March 16:30 GMT) may also affect the dollar, through the dynamics of stock market indices. Overall, the dollar remains strong. It is now becoming increasingly clear that, of all the central banks of the leading economies of the world will be the first Fed, who will go to minimize monetary stimulus.

Tenderers for the single European currency coming week promises to be quite calm. Yield meaningful statistics for this period is planned. We believe that in order to fall below the level of 1.30 euros in no meaningful fundamental premises. Move down for him may be caused only by strengthening the dollar along the market or the growth of political risk in Italy. In general, in the coming weeks look logical variations in the range 1,30-1,37. However, if the dollar continues to strengthen, the EUR/USD may come under pressure to try the strength of a mark 1.2820.

For the British pound major release of the week — The index of industrial production, which will be published on Tuesday 12 March at 13.30 GMT. Macroeconomic data from the United Kingdom in recent years is negative. The slowing of the industrial sector in the early month signaled PMI. Accordingly, we do not expect there positive «surprises.» In case of breaking support 1.50, the next target will be 1.4740 movement.

The main event of the week for the Australian dollar will be the data on the labor market, which will be launched on Thursday 14 March at 04.30 GMT. If they also prove positive, the AUD/USD will have a chance to increase its pressure on the dollar. In general, the pair could test the 1.0385 resistance in the coming weeks. The only obstacle in this way can be the strengthening of the U.S. dollar along the entire market. He also relies on qualitative fundamental prerequisites in its growth, and it can restrain strengthen «ausi.» Consequently, the chances of the formation of powerful trends are not yet high. To say this will be possible only after the penetration of 1.0385.

Japanese Yen will continue to decline as it becomes apparent that the implementation of plans Abe relatively large-scale expansion program of quantitative easing is just a matter of time. After overcoming the resistance in the 95.00 to the motion was the mark of 100 yen per dollar.


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Market Review for the week from 4 to 8 March | Web Trade For All - Forex trading, analytical reviews of the market and help for beginners