The dollar strengthens its positions throughout the market
On Thursday, January 27, at the end of the day, the euro fell by 0.83% to 1.1145. After the FOMC meeting on monetary policy, which ended on Wednesday, the dollar rally continued. Expectations of a tightening of the Fed's policy led to an increase in Treasury bond yields. After the release of US statistics.
US GDP in the fourth quarter rose by 6.9%, exceeding market expectations of 5.5%. Quarterly GDP growth was the strongest in more than a year, although orders for durable goods declined for the first time in three months.
US futures and the dollar index rose as the data signaled the recovery of the economy after the crisis. Investors are scared by the uncertainty about the number of rate hikes this year and whether the Fed will raise it by 50 basis points in March or only by 25 bp.
Scheduled statistics (GMT +2):
At 10:00 Switzerland will publish the index of leading indicators from Kof January.
At 10:00 Spain will present data on GDP (preliminary data) for the 4th quarter. 2021.
At 11:00 Germany will publish GDP (preliminary data) for the 4th quarter. 2021.
At 15:30 US price index for personal consumption expenditures for December. Consumer income and spending for December.
At 17:00 in the US there will be revised data on consumer confidence index from the University of Michigan for January.
Major currencies are almost all traded in the red. The rally in the dollar index has slowed down, but may accelerate with renewed vigor. The euro is trading lower against the franc, the Canadian and the British. Because of this, the pair weakly recovers losses. On the older TFs, the nearest target zone is around 1.10. The level is very close. If sellers refuse to take profits before the weekend, the euro may fly down 70 points today.
The main factor determining the attitude to risk in the coming months will be the speed of the US Fed's rate hikes. And the speed of its increase will depend on economic data (inflation and the labor market).
Summary: on Thursday, the euro closed lower. The dollar index has updated a maximum of 97.30. The value is approaching the high of June 2020. The euro remains under pressure due to the tightening of the monetary policy of the US Federal Reserve. On the older TFs, the nearest target zone is around 1.10. The resistance level is 1.1220.