The US Dollar strengthened its positions last week. Risky assets were under moderate pressure most of the week after a significant appreciation during a prior period. In particular the US indices made serious attempts twice to get away from their multiyear maximums, losing during trading sessions more than one percent. The profitability of 10 year bonds of the US declined to the figure of 1.95. Macroeconomic statistics from the US continued to be positive, but the Dollar overall moved depending on behavior of risky assets. A significant impulse for its appreciation was the speech of Mario Draghi, during which he turned out to be less optimistic about assessing the EU economics’ perspectives. The rate of the Euro against the Dollar dropped significantly after the ECB head cooled down the passion of the adherents of Euro strengthening. There was no important macroeconomic statistics able to affect the fundamental picture of region’s economy.
During the coming week there will be no macroenomic data of utter importance, that would be able to have a significant impact on the US Dollar. Nevertheless, the data on retail sales on Wednesday may trigger mass reaction on the markets. In its turn it might affect the US Dollar. Overall on global markets risky assets generally pass the period of correction.
The pair was correcting the whole week and after the conference dipped testing the support at 1.3380. In general the situation is quite uncertain and the most likely trend is sideways in the area of 1.3260-1.37 for the coming weeks. As mentioned above, risky assets are mostly in correction period. The latter fact has a positive effect on the US Dollar positions. Still, the fundamental picture remains unfavorable for it.
The British Pound improved its positions a bit. In general the Pound shows signs of stabilization. We assume that Bank of England is not likely to modify its fiscal and credit policies. Stabilization in services sector will support the Pound. Analysts believe that the Pound has potential to attempt rising up to 1, 5890, if it is supported by the Euro.