The market is preparing for the holiday season and traders close their positions before leaving. Most of the currency pairs are moving mainly because of technical reasons as the limited economic news fail to influence them.
Fed Yellen’s Testimony Managed to Save the Greenback
Federal Reserve Chair Janet Yellen’s two-day testimony finally managed to stimulate partially the U.S. dollar on the second day reminding that they still plan to raise interest rates. The greenback picked up against the euro and the Japanese yen on Thursday, while it failed to record gains versus the British pound and the commodity currencies. Yellen expressed her opinion that labour market is quite tight and this causes pressure on wages. Regarding inflation, she stated that is “premature to say the underlying inflation trend is below 2%” as “nothing suggests that the expansion will die anytime soon”. The U.S. monthly budget statement revealed a deficit of 90B in June versus forecasts to have shrunk to $35B. The producer price index, also for June, slipped to 2% versus 2.4% before, however, it is above the estimate of 1.9%, year-over-year. The focus of the USD traders today will be the U.S. CPI and the retail sales, as Fed pays a lot of attention to inflation rate, for their future rate hike plan.
Read the full financial markets daily report on JFD Research.