On Wednesday morning, the main currency pair continues retreating, but it took the political factor into account and is ready to attack.
The EUIR/USD is falling on Wednesday morning. The current quote for the instrument is 1.1760.
During her yesterday’s speech, Janet Yellen, the US Federal Reserve Chairwoman, said that it was very essential to continue increasing the key rate. According to her opinion, a consequentialism is very important here. The low inflation in the USA allows to keep the current monetary policy, otherwise the employment market may get “overheated” and some other complications may occur. Yellen thinks – and one should admit that she’s pretty objective – that there is no point in waiting for the inflation to reach the target level of 2% and keep the key rate unchanged for all this time.
In this light, the CME futures say that expectations of the Fed rate increase during its December meeting reach 70%.
On the other hand, the European currency is slowly getting back to life after the German elections. Investors analyzed all available information about the CDU attitude and possible ways of forming a coalition with other parties, which didn’t win many votes in the Bundestag, and came to the conclusion that nothing really serious had happened yet. And calmed down. When this “potato” stops being “hot” completely, the Euro will be ready to recover against the USD.
In the evening, the USA are going to publish several interesting reports and, taking into account investors’ positive attitude to the USD, one might expect the American currency to strengthen in case there are good reason for that.
RoboForex Analytical Department