Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

USD Doesn’t Like Talk About The Rate

Published 11/14/2017, 03:06 AM
Updated 03/16/2022, 05:50 AM


Despite being pretty clear and logical, talks about the benchmark key rate increase in the USA in December are “haunting” some monetary politicians and investors. These doubts, which were mentioned in Patrick Harker’s comments below, put pressure upon the “sensitive” USD.

Not long time ago, the FOMC member Patrick Harker said that one should be very careful when estimating the USA inflation and the Federal Reserve had to be ready for any stresses and shocks in the economy. Nevertheless, Harker said he would support the key rate increase next month, although he thought that the necessity in the rate hike had been decreasing recently.

He’s not the first American monetary politician to say that inflation risks may be a reason to postpone the key rate hike. In September 2017, the CPI in the USA expanded up to 2.2% y/y and by 0.5% m/m. The last time the indicator improved in the similar way was in January. Between January and September, the inflation growth varied from 0.09% m/m (May and June) to 0.30% m/m. There was even the deflation in July, when the CPI lost 0.07% m/m.

One should admit that the indicator is rather unstable. However, the Fed’s target is at 2% and from this point of view, the index is doing well. “Mood swings” relating to the key rate increase will affect the US Dollar until the regulator’s meeting scheduled for December is over.

The USD perspectives are better seen at the EUR/USD pair chart. From the technical point of view, the downtrend continues. The pair is trading to test the upside border of the current channel and, as a result, may break it and move beyond 1.1690. The uptrend may continue if the price reaches 1.1840, which is the upside border of the projected channel.

EUR/USD

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.