08, September 2014

Fundamental analysis

EUR/USD (a 4-hour chart)

The ECB’s surprise supported the dollar as the US currency strengthened the confidence on all fronts. The market was surprised that the European regulator not only lowered all the key interest rates, but also announced the securities buying that, in fact, is the quantitative easing.

As a result the dollar rose against the euro by 200 points and against the pound over 140 points. The dispute with the yen was also positive for the dollar, but in this case, it seems to have been largely driven by the United States good economic data. As the presented statistics, the United States trade deficit was narrowed in July, instead of the expected increase to -42.5 billion it recorded -40.6 billion dollars, while the initial jobless claims rose, but not significantly, only to 302 thousand against the expectations to see 300 thousand and ADP private sector employment dynamics reports which noted the increase on 204 thousand with expectations of 215 thousand which was quite a positive result.

The positive news came from the Supply Management Institute, the USA non-manufacturing sector activity report in August - the Purchasing Managers Index (PMI) rose to 59.6 from 58.7 in July. Despite the fact that some indicators fell short, it did not carry negative moments for the dollar and did not stop it from the market leadership, as indicator values reflect the high levels.