The condition of the currency market remains positive for the US dollar. Primarily because of the expectations on good employment data to release on Thursday and Friday. Previously, the dollar has received support mainly because of the unchanged position of the Fed in raising interest rates, as well as the personal statement made by the head of the Fed, clarifying that she expects a current slowdown in inflation while some economic indicators as a temporary phenomenon.
In addition to it, she confirmed twice the continuing policy on the rate hike, after the bank's meeting in June, which will happen along with the balance reduction of the Central Bank.
An important data to be released this week are the figures of new jobs and the unemployment rate in the US. It is projected to be positive and will support the plan of the Fed on not to change their selected course.
Over the past week, the interest rates of the futures market on US Federal Funds were affected to the 50.4% increase in expectation of interest rate growth in December. The government bond market further showed an increase in yield after testing the local minima. The yield on 10-year Treasuries as of this writing traded at 2.334%, which is noticeably above the local minimum of 2.134% in the previous week.
We can be confident enough that the dollar will get a strong support, if the Fed minutes of meeting confirms a consistent trend to resume the raising of rate, not only for this year but also in the future. While employment figures are also in good level, therefore we should anticipate for the continuous strengthening of the US currency.
Aside from the minutes of the meeting of the Federal Reserve scheduled for this day, the data on business activity indices under the services sector of Russia, Germany, the euro region and Britain will come out as well.
Forecast of the day:
The EURUSD pair could move upwards to 1.1375-80, however, failure to rise above that point is possible for a downward turn on the back of the US Federal Reserve meeting on June which supports the positive US dollar.
We expect that the pair will continue to decline, and we believe that it should be sold either on growth from 1.1375 or overcome the 1.1340 mark with a potential move down to 1.1270.
GBPUSD is trading above 1.2910 and most likely, it will resume a correction plunging to 1.2845 after falling below the level of 1.2900-10.
