Yesterday the market made something similar to correction. And if in the first half of the day fixation of dollar’s long positions started only due to technical factors, then at American session fundamental reasons appeared for it – US report on retail sales was unexpectedly weak (the decline by 0.6% was detected instead of growth by 0.3%). Still, this correction wasn’t developed and negative data on retail sales were quickly regained. In fact, US negative was ignored, what is in favor of dollar and casts doubts on probable development of stronger correction.
The last work day of current week is unlikely to bring surprises. In the Eurozone Germany will publish report on wholesale prices and Italy will release the data on inflation for February. They aren’t very significant, so we don’t expect strong reaction to them. The same is true for US statistics – today there are producers’ prices. Something notable can happen only in case of considerable discrepancies between the data and forecasts, and that is improbable. Next week the Fed regular session will be held, and before its outcomes and without strong drivers very few will desire to change something radically in current balance of power. There are technical factors in the form of dollar’s overbought, preventing its further strengthening, still, there are also market’s expectations about “tightening” of final communiqué at nearest session of the Fed.
Speaking of local data of this day, we’d like to highlight the report on unemployment in Canada. Expectations are pessimistic – both decrease in number of the employed and increase of unemployment level, what can provoke sharp fall of Canadian dollar after publication of this report. USDCAD pair may appear to be the most active today.
Yesterday’s attempt of dollar’s correction looks unconvincing. Sharp euro’s rollback from daily maximums yesterday indicates the fact that interest to the pair’s sales remains high. Today probable range of movement is 1.0540 – 1.0660. Euro can improve its prospects if it closes the day above 1.0720. Now we prefer to stay out of the market and we have no clear view of further development of events. There is no question whether the trend of dollar’s growth is retained. Still, there is a question how strong the correction can be and when.
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