Friday 11 November 2016

Dollar back on the top

After yesterday's shake-up, the rate of the dollar has stabilized and is trading at a "bullish" bias against most currencies. Investors continue to buy risky assets, against which one of the main outsiders remains the yen. USD/JPY easily broke 106.00 and has come close to the next psychological mark.
After Trump's victory the markets are wondering how policies of the new president will be reflected in the rate of growth of the US economy and the world economy as a whole. Rally in the segment of risky assets suggests that players are optimistic about the future, betting on the development of business, tax cuts and increased investment in infrastructure. At the global level, there are also fears that Trump would unleash a trade war that would hit many economies of the world.
Positive attitude of the USD was supported including by expectations with respect to the December Fed rate increase. Today, the probability of such events is estimated at 80%. In other words, the tightening policy of the regulator is considered a foregone conclusion, although in the moment immediately after the announcement of election results, the rate fell below 50%. Today, the players concerns about policy changes in the Central Bank partly dispelled by Trump's statement that he does not intend to request early retirement J. Yellen.
Among the next economic events that should pay attention to the aspect of the prospects of increasing the cost of credit in the United States, we can point the report on retail sales, announced for next Tuesday. If the result exceeds forecasts, the remaining doubts about the December tightening will almost completely dispell, and the USD will receive an additional boost to growth.


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