10, October 2014

Fundamental analysis

 EUR/USD (a 4-hour chart)

The last Federal Reserve meeting report knocked down the US dollar - the dollar index basket (USDX) came to the mark 85.35. Then the dollar won back some positions.

The FOMC currently believe to keep the federal fund rates low "for an extended period of time." It was told that the dollar revaluation against its major competitors could prevent inflationary pressure and also lead to the negative payment balance increase. It was emphasized that the Eurozone weak economy has the possibility to continue the dollar quotations growth in the foreign exchange market.

The euro remained under pressure after the data which reported a sharp August industrial orders decline in Germany, fearing that the euro zone's largest economy deviates towards the recession.

The disappointing data reinforced our views that the European Central Bank would resort to the new stimulating measures to promote economic growth.

According to the two-day policy meeting results, the Bank of Japan kept its monetary policy unchanged, but it acknowledged that the reducing consumption after the April sales tax increase leads to an economic weakness.