The dollar stopped its growth against the major currencies on Tuesday, but still received support, as investors remained cautious after a series of terrorist attacks in Brussels that killed 26 people and left wounded more than 100. The tragic events in Brussels had a negative impact on the euro and the British pound.
In the absence of important macroeconomic reports the market consolidated in a narrow range. Even the US releases did not revive the market. Existing Home Sales for February came in at a minimum level, having decreased by 7.1%, while analysts had expected a more modest drop of 2.8%. Chicago Fed National Activity Index for February came in at -0.29 vs. the forecast of +0.25 and the previous value of + 0.41.
We will pay attention to the IFO Institute publication. This indicator is closely correlated with the dynamics of the German GDP and is always closely monitored by investors. This indicator has been showing a negative trend last three months. The market did not expect the data better than the consensus forecast amid strengthening of the euro. However, the data came in at the level of 106,7 against the forecasted 106,0. The pair euro/dollar fell.
The Inflation Report was published in the UK. As we expected the strong labor market figures pointed to the report that was slightly better than the consensus forecast. The unemployment in the UK is at the lowest level since 2005 now, while in the last three months the average monthly earnings showed 0.2% growth to 2,2% from the previous 2,0% which would increase inflationary pressures. The Consumer Price Index came in at the level of 0,3% y/y and 0,2% m/m against the forecasted 0,4% y/y and 0,4% m/m. The pair pound/dollar sharply fell.
We do not expect strong growth of quotations right now. The United States disappointed investors with weak macroeconomic statistics: Existing Home Sales for February decreased by 7.1% in February. The home sales fell by 6.7% from January to March, which once again confirmed the hypothesis that the Americans began to save more than to spend. The pair dollar/yen strengthened.Publication source