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    FOMC minutes disappointed dollar bulls

    FOMC minutes disappointed dollar bulls

    During the most part of the previous day trades were multidirectional, depending on local events. Pound was most successful after strong data on unemployment – besides decreased number of the unemployed, the average salary grew significantly, what allowed pound to renew February maximums. The common currency didn’t manage to hear the request to prolong the assistance program from Greece and fell under 1.1400 to minimums of the beginning of the week again. Unexpectedly for us, FOMC minutes provoked a strong splash of activity in the market. Following them, it turns out that now almost all members of FOMC speak more cautiously about terms of start of increase in rates, noting negative influence of strong dollar on export. As a result, by the end of American session dollar passed all positions it had achieved during the day.

    Today’s statistics, published in main economic regions, don’t contain significant data. In the Eurozone payment balance and consumer confidence will be published, in the U.K. – CBI data on industrial production, in the U.S.A. – weekly applications for unemployment benefits and production activity of Philadelphia. They are unable to have much influence on market’s dynamic, the reaction will be limited. Still, today there are some events which can cause more notable reaction. First of all, it is the same tired expectations of Greece. In spite of everything, euro shows resistance, what indicates the hope remains that negotiations will end successfully. Secondly, today the ECB will start publication of its minutes in terms of more transparency in its actions. It’s first experience and it is unclear how the market will react. At least, published minutes will allow players to understand more clearly which objectives the regulator pursues when it makes any decision. Publication of the Fed’s minutes often provokes serious movements in the market. Probably, the same will happen with minutes of the session of the second worldwide regulator. Besides, today the speech of Bundesbank head Weidmann is scheduled. His speech may contain something significant about Greece as well as inflation in the Eurozone and quantitative easing program by the ECB.

     

    Trade tactics:

    Yesterday we had to reopen our position on euro again. The previous one is closed on stop without loss, a new purchase for 1.1350, stop is at the entry point. Actually, it is our last attempt to take long position on euro in the short term. Further it makes sense to look at exit from the range 1.1270 – 1.1450. Failed attempts to break through the upper boundary of the range can disappoint euro bulls and cause reversal to the opposite direction.

     

    Any opinions, advice, news, research, analyses, prices or any other information presented on this webpage is provided as general market commentary and does not constitute investment advice. "Vector Securities" shall not be liable for any loss, including loss of profit, which may arise directly or indirectly from the use of this information.


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