14, April 2016

Fundamental analysis

EUR/USD (a 4-hour chart)

The dollar continued its attempts to recover. The latest Fed hawkish statements supported the dollar. In particular, Jeffrey Lacker (the Fed representative) said that the Fed is still planning four rates hike in 2016. The US currency got an additional support when the Fitch agency confirmed the US rating at AAA.

Retail Sales and the Producer Price index for March became the main events of Wednesday. The Retail Sales showed -0,3%m/m against the forecasted 0,1%m/m and previous data of -0,1% m/m. The Producer Price Index showed -0,1%m/m against the forecasted 0,2%m/m and previous data of -0,2%m/m.

The inflation data in Germany did not have any impact on the quotations. In March, the Consumer Price index remained at + 0.8% m/m and + 0.3% y/y. The growth of stock indices caused the euro sales. The pair euro/dollar decreased.

The UK inflation positive report for March supported the positive trend in the Bonds Market. The yields differential on government bonds (the United States and the United Kingdom) have been reducing for the last three trading days. This news increased the attractiveness of the British assets. However the trades on the pair pound/dollar closed with a decrease.

The 10-year government bonds yield differential (the US and Japanese) expanded which increased the attractiveness of the US assets providing support for the dollar in the pair USD/JPY. This pair showed a growth.