Published On: Wed, Mar 1st, 2017

Midday Market Review


Today the dollar is actively growing against its major counterparts due to statements of the Head of the Federal Reserve Bank of San Francisco John Williams and President Donald Trump. Williams pointed out that March is the month when the FOMC must pay attention to the question of raising rates. This comment gave investors hope for an early tightening of monetary policy and provided significant support to the dollar. An additional incentive of US currency growth was the performance of Donald Trump in Congress. Although he did not clarify the topic of tax reform, but offered to invest in infrastructure $ 1 trillion.

To date, the US dollar against the euro has gained 0.47% (to 1.0520), against the pound – 0.64% (to 1.2300), against the yen – 0.98% (to 113.90). A somewhat more complicated situation is in the pair US dollar against the Australian one: at the Asian session “Aussie” increased to the level of 0.7700, which was caused by the strong Australian GDP data for the IV quarter of this year (the growth rate of 1.1%, instead of the expected 0 7%). However, then the decrease in quotations resumed and now the pair is trading around 0.7660. Note that the overall strengthening of the American currency during the day can continue, especially in the case of strong data on the index of business activity in the US manufacturing sector in February.

Gold also responded to the possibility of an early increase in interest rates and the possibility of large investments in the infrastructure of the United States with a fall down to the level of 1240.45 (0.63%). Silver, however, rose to 18.25, but is now adjusted to the level of ​​18.25.

Crude Oil this morning was corrected under the pressure of the weekly report of the American Petroleum Institute, which recorded another increase in inventories by 2.5 million barrels. However, after the announcement of the data on the successful implementation of the agreement of OPEC + in February (94%) the price rose again, Brent reached a level of 56.80 and WTI – 54.35. Currently, prices are trying to be adjusted and may continue to decline in the case of confirmation of the growth of oil reserves in the United States by the Office of the US Department of Energy statistics, the weekly report will be released in the evening.

Both US and European indices reacted with great enthusiasm on Trump’s speech. FTSE100 and CAC40 reached annual highs, rising in the morning by 1.13% (7357.5) and 1.46% (to 4946.5). DAX strengthened by 1.03% (to 12025.5). US indices reached annual highs: DOW rose by 0.70% (to 20983.0), S & P 500 – by 0.59% (to 2379.5).

Forex Analysis

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