Vector Securities - Analytics

    Vector Securities

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    Dollar got one more severe blow

    The Fed had to correct its expectations for prospects of increase in rates this year. Now the regulator expects only two increase of rates instead of four. Janet Yellen’s speech was moderate, risks of influence of global events on US economy and weak export were detected. Market reaction is natural – dollar passed positions sharply on almost all currency pairs. From our point of view, this decision will become the base for formation of middle-term tendencies in the market, and they are unfavorable for dollar.
    At Asian session local data on New Zealand and Australia were published – GDP for the 4th quarter and unemployment report correspondingly. Both indicators were better than predicted, what coincided with the general mood of the market and allowed these currencies to renew their local maximums, achieved after FOMC decision. During this day, two more regulators will hold their sessions on monetary policy – SNB and BoE. Still, they aren’t very significant at this moment. Changes aren’t expected, surprises are unlikely. Final data on the Eurozone’s inflation and trade and payment balances will also have weak influence on trades’ dynamics. The market will continue moving under impression of yesterday’s events, though with less energy. 
    Trade tactics:
    Under current conditions, it makes no sense to sell euro. It is worth looking for opportunities for purchase. Today previous local maximums of February at 1.1370 are on the agenda. We recommend considering pair’s purchase at current levels 1.1220 – 1.1230, stop at 1.1110, the initial aim at 1.1290 – 1.1310. In case of a pair growth of more than 30 points from the entry point, rearrange stop at the entry point.
    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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