Despite the fact that macroeconomic statistics was clearly in favor of the dollar, the greenback had to surrender its position against the euro. This is largely due to the growing tension between the US and Russia. Strange as it may seem, it is not only the ruble that suffered from new US sanctions. The dollar also had a hard time, as investors do not like warlike appeals, especially against the largest nuclear power holder. Although the politicians of both countries regularly made conciliatory statements, this had no effect, as literally immediately after, other representatives of the ruling class, especially the United States, began to throw threats. Moreover, the massive rockets fired over Syria did not add calmness, since until the last moment there were fears that the Russian military might accidentally hit the United States with France and Britain by its blow.
However, if you look at the statistics, everything is pretty good in the US. The rate of producer price growth accelerated from 2.8% to 3.0% and inflation rose from 2.2% to 2.4%. So there is no doubt that the Fed will fulfill its promise and double the refinancing rate twice before the end of this year. The data on the labor market was somewhat disappointing, as the number of applications for unemployment benefits increased by 44 thousand. This was due to an increase of 53 thousand of repeated applications, which indicates the growth of long-term unemployment. This is an extremely bad signal. However, given the data on inflation, investors could not afford to pay attention to this annoying moment. However in Europe, the growth rate of industrial production slowed from 3.7% to 2.9%. So we can say that if it were not for statistics, then the dollar would certainly be noticeably cheaper.
This week, Europe will again receive very little news. In particular, we are talking about inflation. However, these data will not have a significant impact on the market, since the final data should coincide with the preliminary estimate, which showed growth from 1.1% to 1.4%. All this has already been taken into account by the market. In the US, it is expected that the growth rate of retail sales will accelerate from 4.0% to 4.2%. If we recall the growth of inflation, then the growth of retail sales further increases the profit of companies, so investors have a reason for joy. Significant growth is also expected both in the number of issued construction permits and in the new construction projects themselves. True, the growth rate of industrial production may slow down from 4.4% to 4.0%, which is quite expected, since the stockpile has been growing for quite some time. And now commercial reserves can increase by another 0.6%. Despite this, the negative impact will be mitigated by the expected reduction in the number of applications for unemployment benefits by 34 thousand.
However, as well as during the past week, good statistical data will only support the dollar a little, as the political situation is heated to the limit. The US announced new sanctions against Russia, and also intend to strengthen its military presence in Syria. Naturally, the growing confrontation between the United States and Russia will have a negative impact not only on the ruble, but also on the dollar to a much lesser extent. Thus, it is worth waiting for the further growth of the euro to 1.2425.
