EURUSD continues trading upwards; the USD remains an “outsider”.
The major currency pair boosted its growth last night and intends to keep the pace today. The current quote for the instrument is 1.2253.
Global investors are pretty sure that the international economy will recover quite soon and this confidence makes financial markets very optimistic. In this light, the demand for “safe haven” assets, such as the USD, is reducing, thus putting a lot of pressure on the American currency. The higher the optimism based on the aggressive anti-coronavirus vaccination campaign and removal of some social restrictions, the worse for the “greenback”.
One of the things that may slow the USD on its way down is a renewed interest in American inflation. A lot of investors still believe that the US Federal Reserve System will have to respond to the inflation boost, “will it, nill it”. This response may be a revision of its monetary policy regarding the benchmark rate. If something really changes here, the USD will resume rising instantly.
As a result, market players’ attention is switching to the statistics on the Personal Income and Spending to be published on Friday. The first indicator is expected to drop: in March, it added 21.1% m/m but only because of government checks, that’s why in April it may lose 14.8% m/m. There is no reason to be afraid of these readings – it will be better to pay attention to the components of the report. The second indicator may add 0.4% m/m after expanding by 4.2% m/m the month before.
Judging by these numbers, one may draw an intermediate conclusion about the current Consumer Price Index state. In this case, the USD may become more active.