2017 was the worst year for the US dollar in the last decade, but the analysts say that this is not the end. The low inflation and a moderate growth of the US economy contribute to the further weakening of the US currency. Investors believe that the closing of the asset purchase program and the normalization of the ECB policy will support the euro against the US dollar. Today, in the US the "Beige Book" of the Fed will be published. Also, there will be the representatives of the FOMC speech. Nevertheless, in the short term, the US dollar may recover some of the losses.
The main event of this week will be today's decision of the Bank of Canada on monetary policy. Financial markets participants expect that the rates will increase by 25 points to 1.25%. The British pound holds positions against the US dollar. According to the latest consumer prices report, the inflation pressure has slightly decreased. More importantly, despite the fact that some countries agreed to a soft exit of the UK from the EU, the European side continues to hold a tough position in the negotiations. We recommend following the further trend of affairs.
The "black gold" prices are in a sideways trend. At the moment, futures for the WTI crude oil are testing a price of $63.75 per barrel.
Market Indicators
Yesterday, the "bearish" sentiment prevailed on the US stock market. The main indices closed in the negative zone: SPDR S&P 500 (NYSE:SPY) (-0.34%),Dow Jones Industrial Average (-0.04%), PowerShares QQQ Trust Series 1 (NASDAQ:QQQ) (-0.29%).
The 10-year US government bonds yield is at the level of 2.54-2.55%.
The news feed on 2018.01.17:
- The Eurozone consumer price index at 12:00 (GMT+2:00);
- The US industrial production volume at 16:15 (GMT+2:00);
- The Bank of Canada meeting at 17:00 (GMT+2:00);
- Fed's Beige Book at 21:00 (GMT+2:00).
We also recommend paying attention to the speeches of the Federal Reserve Banks presidents.