Yesterday after consolidation during the whole European session, dollar recaptured the initiative at last. Dollar’s index has approached April’s maximums and is preparing to storm the level 100.00. Driving forces are the same – expectations of increase in rates in the U.S.A. and widening of stimulation policy in the Eurozone. Terrorist attacks in Paris added negative to the common currency. Euro returned to the levels of this April too. Moods of market players are fully on dollar’s side now.
This day can be quite active, the reason is rich information background. In the Eurozone ZEW institute will publish its report on moods among investors. For last months its indicators have shown negative dynamics. Forecasts point at some stabilization of moods. Still, it is unlikely to provide considerable support to euro. Under players’ growing confidence in increase of rates by the Fed, this report becomes less significant for investors. In this regard, today’s statistics from the U.S.A. (consumer inflation and industrial production) are able to play more important role. Dollar needs visible confirmation of market’s expectations. If the data are better than predicted, then growth of American currency can speed up. For pound the report on inflation will become an important event today. Now decrease of British pound is at more moderate pace than euro. Depending on inflation figures, it will become clear whether this restraint will remain or pound’s decrease will speed up.
In accordance with our assumptions, we opened short position on euro from 1.0742 yesterday. Now the market let rearrange stop to the entry point. Stated aims in the range 1.0610 – 1.0630 remain in force. At this moment the main choice is whether to fix profit or keep short positions. We tend to favour keeping positions. We don’t see conditions for euro’s purchases now.
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.