US Federal Reserve may stick to safe policy

Posted 11 April, 2018

The US-China stand-off remains the topic issue in the global market. Although the tensions somewhat softened between the parties, investors remain heads-up waiting for further development of the situation. The signs that China and USA are ready to hold meaningful talks will reportedly support demand for the risk that started slackening at the morning trading on April 11. This is confirmed by just slight upturn recorded in Asian stock markets.

Meanwhile, the market expert estimates that the currency markets will focus on the US reports – inflation data and minutes of Federal Reserve March meeting. Despite positive labor market performance and good economic growth, prices do not soar. However, annual CPI could rise to 2.4% (2.2% earlier) in March, as the forecast showed. If the expectations come true, the figures are said to be the highest y-o-y. Notably, base CPI that gives more accurate results as does not cover volatility components, exceeded 2.0% (1.8% earlier).

In that case, the greenback will start rising on all fronts driven by an anticipated faster lift of the interest rate by Federal Reserve, the expert estimates. However, its response is unlikely to be a long-lived anyway, since the market will be careful ahead of the Federal Reserve minutes release. Still, the regulator will hardly make any starling statements and may adopt a waiting mode following the stand-off with China.

Previous forecast

12 April, 2018 13:18

← Daily Analysis | EUR/GBP | 12 of April

The EUR/GBP has been trapped within the narrow range of W L3 and W H3 Pivot. Slow price action indicates that we might expect a breakout when volatility gets higher. At this point, the price is stalling between the two trend line diagonals that also intersect essential pivot points. Break of W H3 – 0.8737 should target 0.8760 and possibly 0.8792. However a break of D L3 – 0.8710 should target 0.8680. 

Daily Analysis | EUR/GBP | 12 of April

Next forecast

05 April, 2018 17:29

Sterling positive about May rate increase →

The UK posts not very optimistic economic data this week. Construction sector showed quite weak PMI yesterday, while on Thursday service sector reported minimal growth since the referendum. Notably, the service sector accounts for the major part of UK's economy. Despite pessimistic signs, sterling bears do not expand push for a decline. The sterling to US dollar stays moderate...

Sterling positive about May rate increase
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