17, December 2015

Fundamental analysis

EUR/USD (a 4-hour chart)

The Markit published the December German manufacturing sector business climate report. The data came out at the forecasted median at the level of 53,0. The indicator has been growing for two months amid the euro weakening which has strengthened the German products competitiveness abroad. The US Federal Reserve monetary policy decision drew the market attention yesterday. The FOMC raised its rate by 0.25% to 0.50% having noted the strong upward trend in the labor market. When the oil market stabilizes –the US population income growth will put upward pressure on inflation expectations. The pair euro/dollar decreased by the end of the trades.

The UK and the US inflation releases determined the "bulls" and "bears" battle results. The UK inflation showed 0.08% against 0.77% in 2015. The inflation dynamics was not in favor of the United Kingdom the previous month: the US CPI growth rate was 0.16% against 0.74% for the ten months. The UK National Statistics Office published the labor market release. The average wages level gained 2.4% instead of the forecasted 2.5%, while the unemployment rate rose by 5.2% when the forecast was 5.3%. The pair pound/dollar fell by the end of the day.

The world's leading stock markets corrected after massive sales. The short-term uptrend is continued putting pressure on the Japanese yen as a funding currency. The dollar index basket dynamics (USDX) pointed to the US currency phase correction which is over now and now we expect the further long-term uptrend. The pair dollar/yen showed a growth.