Fundamental analytics

Markets focus on another important US data- august retail sale

The main FX market EUR / USD keeps bullish momentum of the movement amid the continues weakening of USD dollar. Weak statistics on the consumer price index yesterday lowered the expectations of a rate hikes as the negative inflationary dynamics will continue to be present in the next months. However, there are no threats for the third interest rate increase at the September meeting, market is also set to see the rate hike 26 September. However, a decrease in inflation expectations could reduce the probability of a fourth rate hike in December 2018, which was partially priced in higher dollar price. The decline in these expectations causes the USD dollar sell-off we see this two last sessions. The dollar index continues to decline; and today the index tests the mark of 94.35 points.

In addition, signals about possible warming in US-China trade relations are also playing against the US currency, as the US side initiates a new round of negotiations, which many investors noted as a positive signal.

What is good for Euro that Mario Draghi speech did not lead to a decrease in demand for the euro, like it was observed after the previous speeches of the head of the ECB. Draghi supported the neutral tone of the speech noting a number of positive moments regarding the expectations of improving the situation with inflation in the Eurozone.

Important statistics continue to appear in the US. Today we will analyze the figures for retail sales. It is expected that the indicators will decrease, which can cause even greater pressure on the American currency.

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