The dollar gave up its position so briskly that it was even somewhat surprising. Especially considering that the total number of applications for unemployment benefits, which decreased by 34 thousand instead of being reduced by 20 thousand. At the same time, the number of initial applications for unemployment benefits turned out to be exactly the same as expected, that is, it increased by 8 thousand. But the number of repeated applications was reduced not by 28 thousand, but by 42 thousand. And considering the much greater importance of just the number of repeated applications for unemployment benefits, the dollar’s weakening really causes genuine surprise. But it is still more fun, because when this data came out, the dollar showed an upward trend, the same as at the time of the publication of data on retail sales in the UK, whose growth rates accelerated from 2.2% to 3.8%, and not to 2.6%, as predicted.
However, everything falls into place if you look at exactly when the dollar began to rapidly lose its position. This happened when the representative of the Federal Reserve System, Mr. Williams, spoke during the next speech. He became the second member of the Federal Commission on Open Market Operations, expressly stating that he would vote to lower the refinancing rate. True, the market is already ready for this, and such statements should not have frightened investors. However, Mr. Williams added that reducing the refinancing rate alone is not enough and by the end of the year it will have to be reduced again. That is, a member of the Federal Commission on Open Market Operations expressed in a clear manner that, until yesterday, wandered around the market only as speculation and assumptions. Namely, that by the end of the year, the Federal Reserve will reduce the refinancing rate twice. So if before that there were still doubters, then last night they sharply began to reduce their positions on the dollar.
Today, no macroeconomic data is published, so investors have nothing to rely on. Scheduled speech Bullard will not bring anything new, as he not only made a statement first about lowering the refinancing rate, but still had time to vote for this decision during the last meeting of the Federal Commission on Open Market Operations. Therefore, the most likely development of events is a technical rebound, due to the local oversold of the dollar.
Thus, the single European currency can complete the week in the region of 1.1225 – 1.1250.
On the other hand, the pound will gradually decline in the direction of 1.2475.