The American currency can receive an additional stimulus, in addition to those already existing, for further growth in foreign exchange markets.
The administration of D. Trump will submit to the US parliament his tax reform plan, the idea of which was, in many ways, the reason for the dollar's growth at the end of last year after the current president's victory in the elections. If this bill is adopted, it will be possible to expect further strengthening of the US currency, which has recently received quite good support in the wake of the outcome of the Fed meeting, where it was clearly announced about the continuation of the policy of normalizing monetary policy. Also in his speech on Tuesday in Cleveland, J. Yellen, the head of the Fed, confirmed these plans and added that it was necessary to continue raising rates smoothly because of the fear of the possibility of explosive inflation against the backdrop of a strong labor market and overall economic growth. An additional positive factor for the dollar is the beginning of the next month's process of reducing the balance of the Fed, which will reduce the amount of dollar liquidity in the financial system and make the US currency "expensive" with all the ensuing consequences.
In the current situation, we can say that the euro and the dollar are beginning to change "places". If in the first half of this year, the US currency remained under strong pressure on the wave of disappointment. D. Trump, who never managed to launch any of his projects proposed during the pre-election race, as well as slowing economic growth and inflationary pressures. The determination of which the Fed follows the chosen path of normalizing monetary policy, as well as the beginning of reducing the balance of the regulator, fundamentally changing the attitude of investors to the US currency.
Today, important data on US GDP for the second quarter will come out, which, if they are not worse than expected, showing an increase of 3.0%, then stimulate further dollar rallies in foreign exchange markets.
Forecast of the day:
The EUR/USD pair is trading at 1.1745. It can continue to decline if the data published today on US GDP for the second quarter will be no worse than the forecast. On this wave, the price may rush to the level of 1.1650-55.
The GBP/USD pair is testing the support level at 1.3365, which may lead to a decrease to 1.3300 on the back of positive news from the US.
