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The European currency reached stability. Overview for 20.02.2019

20 february 2019 - Fx4News

On Wednesday morning, the major currency pair is looking stable and may continue growing due to yesterday’s momentum. 

Last night, the Euro was actively recovering against the USD and right now it is looking pretty stable. The current quote for the instrument is 1.1343.

One of the reasons why the USD started falling yesterday was the decrease of 10-year bond profitability. Apart from this, market players responded to the comments of the US Federal Reserve representative Loretta J. Mester, who said that slowdown in the country’s economy and employment would be the most probable scenario. In her opinion, the regulator has an opportunity to gather all necessary information before changing and revising its monetary policy. Investors perceived her words as another indication that the Fed was ready to make a pause in rate hikes and this fact counted against the USD. 

Mester thinks that the US inflation may remain at 2% and the country’s economy may continue improving. In this case, the regulator may have a chance to increase the rate a bit. 

Wednesday’s economic calendar is as brief as yesterday. Since there aren’t too many things to pay attention to, one should check the German PPI in January. The indicator is expected to be -0.2% m/m (+2.2% y/y) after being -0.4% m/m (+2.7% y/y) in the previous month. These numbers are rather minor and won’t probably cause any serious fluctuations, although they are quite important in assessing slowdown in the German economy and may help to view an overall picture, because Germany remains the leader of the Euro Area economy no matter what. 

In the evening, the Euro Area is scheduled to report on the Consumer Confidence in February. The indicator is expected to recover up to -7.8 points after being -7.9 points in January. However, it’s not very significant for EURUSD.

Apart from some minor events, due to the lack of other fundamental news, market players may be attracted by the European Central Bank meeting, which is barely connected to its monetary policy. Later in the evening, the US Federal Reserve will publish the FOMC Meeting Minutes, which may force more active movements in the major currency pair. 

Investors understand that the Minutes won’t tell them anything new or different from what was said during the meeting. However, sometimes or even seldom, the report offers some phrases, which can be met with a mixed reception, and they become catalysts for short-term movements. Such phrases may hint at possible time of rate hikes or otherwise. In case of a “thin” market, even these insignificant catalysts may trigger significant fluctuations. 

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