Good data on the American economy that emerged yesterday afternoon did not lead to the strengthening of the US dollar against the euro and other currencies but served as a catalyst for large players who increased long positions in risky assets, in anticipation of today's changes in the asset repurchase program from the European central bank.
According to the report of the US Department of Commerce, orders for durable goods in September this year rose by 2.2% compared with the previous month, while economists expected growth of only 0.8%. In the first nine months of this year, the growth in new orders was 5.2% compared to the same period in 2016.
Sales of new homes in the US also increased significantly, which indicates the continued demand, despite the fact that stocks in the market are still limited.
According to the US Department of Commerce, home sales in the primary housing market in September 2017 increased by 18.9% and 667,000 homes per year. Economists had expected that sales would drop by 0.9% to 555,000 homes a year.
Today, all attention will be focused on the decision of the ECB on interest rates, which are likely to remain unchanged, as well as on the comments of the ECB head on changing the current program for redemption of bonds. Many expect the regulator that will extend the quantitative easing program for nine months from January next year, but with the volume of purchases, this will be cut twice from 60 billion euros to 30 billion. If so, the European currency has a quite good potential for further growth against of the US dollar.
As for the technical picture of the pair EUR/USD, the breakthrough of the resistance level of 1.1830 will be another signal to increase long positions in risky assets in terms of renewal of 1.1860 and an exit to the monthly maximum near 1.1890, where the first large profit taking on long positions in euro will be noticeable.
The Canadian dollar collapsed against the US dollar after yesterday's decision by the Bank of Canada to leave the target value of the one-day interest rate unchanged at 1.0%.
The pressure on the Canadian dollar increased after the statements of the Bank of Canada, in which it was reported that the monetary policy in the future will depend on the incoming data and the dynamics of wage growth. Considering the fact that the latest data on wages and other reports indicate a weakness in the labor market, it is not necessary to expect changes in monetary policy in the near future.
The Bank of Canada also said that economic growth will slow down, but there will be more steady rates. GDP is expected to grow by 3.1% this year and by 2.1% in 2018.
