On Wednesday, the US stock market was generally trading in the positive zone. The companies' shares were in demand, whose price is supported by the expectations of the encouraging growth of the US economy and its manufacturing sector. Therefore, growth leaders were the securities included in the DOW index and in the S&P 500. But on the contrary, NASDAQ was under pressure.
There is currently an interesting outlook in the American stock market. In particular, we have positive news and growing hopes for promising economic growth in the investor environment that stimulates demand for shares of manufacturing, cyclical, mining companies, and in general, those whose well-being depends on the demand for their products.
The above-mentioned stock market also received support due to the publication of strong data on the number of new jobs from ADP. According to the published figures, the US economy received a significantly higher number of jobs in June, 692,000 against the forecast of 600,000. And although the May values were revised downwards to 886,000 from 978,000, this did not upset investors. At the same time, the values of the index of unfinished sales in the real estate market were also pleasing. It surged by 8% in May against the forecasted decline of 0.8% and a drop of 4.4% for the previous period under review.
Wednesday's data allow investors to hope that the situation in the US economy will gradually level out on a broader front than it is currently observed.
In view of yesterday's events, the US dollar received support. The primary role was played not by the published economic data, but by the growing fears that the Fed may still begin to normalize its monetary policy earlier than expected. The ICE dollar index has already confidently broken through the 92nd mark this week after declining below it during the previous week.
It is not a secret that the Euro currency has a huge significance in the dollar basket, as it allowed the index to rise after the publication of consumer inflation data, which stabilized at 1.9% in annual terms, and its monthly growth remained at the level of 0.3%, being under pressure.
In fact, the market began to form a ratio that was far from favoring the euro against the dollar. If expectations are growing for the latter to change the ultra-soft monetary policy rate to a tougher one, then this does not threaten the Euro currency. Inflationary pressure remains at an acceptable level in the eurozone, which means that the ECB has no reason to revise the monetary rate. In this case, the national currency may continue to decline.
Forecast of the day:
The EUR/USD pair is trading below the level of 1.1845. We expect it to further decline first to the level of 1.1800, and then to 1.1700 in the near future.
The GBP/USD is above the level of 1.3800. We believe that it will continue to decline globally after overcoming 1.3670.
