Fundamental analysis for March 18, 2016

March 18, 2016

The dollar strengthened while waiting for the Fed decisions. However, the dollar sharply turned around and had fallen across the market after the meeting.

As expected, the Fed left the interest rates unchanged, in the range of 0.25% - 0.50%. Still it has plans to make two rate increases instead of four in the current year. The GDP forecast for 2016 was revised downwards to 2.2% from 2.4% previously. Even if the FOMC raises the interest rates only twice this year, the yield differential of USA government bonds shall expand and investors will have no choice but to buy dollars. Moreover, the "risk appetite" increase will put pressure on the euro as a funding currency. The trades on the pair euro/dollar closed with a growth.

The Bank of England meeting results announcement was the key event of Thursday. The UK 10-year government bonds yield declined by 21 basis points since the last meeting of the monetary regulator, indicating a decline in inflation expectations. The BoE kept the interest rates unchanged. The pair pound/dollar strengthened on the Thursday trades.

The market again began taking into account the different direction of the monetary policies of the BoJ and the Fed. One Central Bank softened its monetary policy against a background of low inflationary expectations. On the contrary, the second one plans to increase the tightening, as the core CPI indicator reached the level of 2.3% in annual terms for the first time since May 2012. The pair dollar/yen fell.

Publication source
Fort Financial Services information  Fort Financial Services reviews

December 6, 2016
What will happen with the euro after the ECB meeting
Morgan Stanley strategists believe that the ECB will keep rates on hold at this week’s meeting, but can expand its QE purchase program. But they consider different scenarios with various responses from the euro...
December 6, 2016
Euro shrugs off Italian referendum results rallying to a 2-week high
The single currency opened Monday on a bearish note but managed to pare losses as investors brushed aside the Italian referendum results. EURUSD closed at a 2-week high right near the resistance level of 1.0765 as noted in yesterday's commentary...
December 6, 2016
Financial markets gripped by Monday jitters
Risk aversion intensified during early trading on Monday following reports of Italian Prime Minister Matteo Renzi experiencing a crushing defeat in the referendum on constitutional reforms which sparked concerns of renewed political instability in Europe...

OANDA Rating
Z.com Trade Rating
FIBO Group Rating
Grand Capital Rating
FxPro Rating
HYCM Rating

OptionsXO Rating
Porter Finance Rating
365BinaryOption Rating
OptionRally Rating
24option Rating
Beeoptions Rating