Demand for the US Currency Is Still High. Labor Statistics from the US Is in the Spotlight

The US dollar continued to strengthen against a basket of major currencies after the Fed announced that it did not plan to consider the issue of lowering interest rates in the near future. Fed Chairman, Jerome Powell, said that the regulator did not see compelling reasons to increase or decrease the interest rate. The Fed believes that the slowdown in inflation and consumer demand in the first quarter were temporary. In fact, Powell did not agree with the demands by US President, Donald Trump, to reduce the interest rate. The dollar index (#DX) closed in the positive zone (+0.18%). Investors have taken a wait-and-see attitude before the publication of a report on the US labor market for April.

As expected, the Bank of England left the interest rate unchanged at 0.75% yesterday. The regulator also made it clear that the market underestimated the prospects for raising rates in the next three years. The base rate will probably be raised only once – up to 1% – by 2021. However, the Bank of England Governor, Mark Carney, believes that more than one interest rate increase may be needed. The Central Bank lowered inflation forecasts for 2019 and 2020, but kept the forecast for 2021.

The "black gold" prices significantly decreased after it became known that oil production in the US reached a new record high of 12.3 million barrels per day. At the moment, futures for the WTI crude oil are testing the mark of $61.70 per barrel.

Market Indicators

Yesterday, the bearish sentiment was observed in the US stock market: #SPY (-0.22%), #DIA (-0.48%), #QQQ (-0.43%).

The 10-year US government bonds yield is recovering. Currently, the indicator is at the level of 2.55-2.56%.

- UK services PMI at 11:30 (GMT+3:00);
- Eurozone consumer price index at 12:00 (GMT+3:00);
- Labor market statistics in the US at 15:30 (GMT+3:00);
- ISM non-manufacturing PMI at 17:00 (GMT+3:00).

by JustMarkets, 2019.05.03

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.