At the end of the week, the global market sentiment mood in equities deteriorated somewhat. Yesterday US markets closed the trading session in different directions. Of the three US indices, just industrial DOW was able to close in the green. However, the main market driver was the FOMC meeting results. American regulator did not bring new substantial ideas for analysis. As expected the rate was left unchanged, on the background of high growth of economic activity, a strong labor market and a decrease in unemployment. Thus, the main conclusion that we can make after Fed meeting is the continuation of hawkish rate-hike course. The question now is how many times will the Fed raise rates next year. On such a fundamental background, there is no reason to expect a weakening of the American currency. The current trading week is very positive for USD dollar and it brought straight for greenback. On USD dollar index chart there has formed a strong bullish weekly candle, signaling the further growth of the US dollar. As for the December rate hike, the market has no changes in expectations in this regard. The probability of a rate hike in December is 75-80 percent. Now more interest for the market is the Fed’s plans for the next year, taking into account the current economic situation in the United States.
In contrast to the Fed, ECB does not intend to move to the stage of rate increases, the maximum that investors can count on to complete the QE program, which will be completely curtailed in December, which Mario Draghi once again said yesterday speaking to the Irish Parliament
In the FOREX market, the strengthening of the American dollar continues on Friday. The dollar index is approaching the levels of the annual maximum; it is a zone of 96.60-96.75 points. All other FX instruments are trading under pressure. EUR / USD fell to the yealy minimum in the 1.1300 zone. It should be noted that this is the third decline in the market down to this area over the past three weeks. However, this market zone appears to be quite stable. Here goes the 200th moving average on the weekly chart. This is a strong technical factor.
Today in the United States there will be published a small statistical unit, in which the focus should be on the producer price index, which is a leading indicator of the dynamics of consumer inflation. Economist expect the data at the level of last month at 0.2%. In addition to statistical information the proximity of the weekend will influence the market. Given the volatility of the market during the week and a strong increase in the dollar, traders can fix a portion of the profits and pull back the market from current levels.