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Business / Finance

Dollar ready to take off

Analytical reviews Forex 10.05.2019 at 13:31

Daily analytical reviews of the Forex market from InstaForex company

According to Donald trump, Friday will be "very tough day". The wait is long, the country will meet in the second round of negotiations. The President of the United States on the eve calmed markets, saying about receiving "beautiful" letters from XI Jinping. Although Washington has already started the process of raising tariffs on Chinese imports, he may at any time to cancel.

in Addition, in D. trump appeared in the hands of a new trump card. Data for March showed that the trade deficit with China on an unadjusted basis, decreased to $20.7 billion Is the lowest value over the last 5 years. Delivery of goods to China increased by 23.6% and imports fell by 6.1%. The White house can now speak boldly about the right impact fees. As we remember, in July last year, the United States imposed their delivery on $50 billion from China, in September, the tax base was increased by $200 billion at a rate of 10%, may 2019, the rate rose to 25%.

While the world awaits what the outcome of the story with the heightened conflict, the sellers of EUR/USD can not obtain tangible benefits. Carry traders close positions and go into the funding currency, including in Euro. Moreover, the report on producer prices for April, allowed buyers to gain a foothold above $1.12. Investors worried about inflation, as the indicators did not reach the forecasts. If inflation continues to slow, the fed will be forced to cut rates. Today we expect publication of inflation report. The dollar will be supported to increase the growth rate and the main steam, as a result, will be under pressure.

the belief in the monetary policy of the fed is enhanced. The may poll by The Wall Street Journal showed that this view is shared by 51% of respondents, while in April it was about 44% in March – only about 19%. About the coming recession in the U.S. now say less, this topic has become irrelevant.

I Have to say that the above figures very accurately outline facing the Fed is the problem. Whether it is necessary to reduce the rate in the rapid growth of the economy and sluggish inflation? Maybe a hint we should expect from the negotiations, the U.S. and China.

If the deal had not been reached and trade friction will resume with renewed strength, the dollar will get support, but short-lived. Here is not surprising. Later, the U.S. currency will begin to take positions due to expectations of monetary easing in the United States under the influence of growing international risks.

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