What will happen with the USD?
This Tuesday the United States dollar reached the lowest point in relation to the Euro. Since then the USD keeps silence making traders doubt whether it has already reached the bottom or there will be further fall of the US dollar. As the point of 1.60 is not reached yet we may suppose that there is no more need in growing Euro at the moment, besides the news from the markets and announcements of the officials now turn to be positive for the United States dollar not Euro. For instance, the numbers concerning the situation at the housing market in the USA that turned to be a bit higher than it was expected.
We suppose that the new home sales may follow this way. Moreover, despite the negative situation with the US durable goods the numbers of the non-defense aircraft are supposed to be quite stable (as we can see considering the numbers provided by the Boeing). On the other hand we should consider the European situation. The level of the German business confidence will probably decrease. The possibility of another rate cut from the Federal Reserve is estimated at the point of 82% at the moment. So there is 18% possibility that there will be no rate cut. And it is quite better situation than the one occurred the last week when there was a choice between 25 bp and 50 bp cut rate. Such changes were caused by the growing inflation level: the oil prices increased by $6 a barrel since the last week.
We suppose the USD will continue to grow until the weekend. However it will slow its growth before the issue of the Fed’s interest rate decision and non-farm payrolls. We also suppose the possibility of the next rate cut from the Federal Reserve will surely change as it is not the end of the US economical troubles yet. Such indices as non-farm payrolls will decrease and the volume of the consumer spending will slow its growth.
