Comments of US President Donald Trump yesterday about the US dollar could lead to the formation of a latent pressure on the national currency, as well as, to strengthen the euro and the British pound in the Asian session for today.
Yesterday Donald Trump expressed his dissatisfaction with the volatility of exchange rates, saying that he considers it unacceptable to devalue Russia and China of their currencies, while the U.S. continues to gradually increase interest rates. A number of traders perceived such statements as a signal to the fact that the Federal Reserve may slow down with a future increase in interest rates for this year and the next.
It is worth noting the fact that the United States President Donald Trump's administration violated the rule, which the White House and the Ministry of Finance have been adhering for about a quarter of a century. It is about commenting on the US dollar rate, as well as the actions of the Federal Reserve System.
Following the statements of the US President, a speech was made by the representative of the Federal Reserve Bank, William Dudley, who noted the problem with trade relations between the United States and a number of other countries created many contradictions.
Dudley also commented on the rate of interest rates, considering it necessary to keep the path of gradual winding down of soft policy. In his opinion, we can expect another three or four rate increases in 2018.
As for the sharp movements in the stock markets, in his estimation, the growth of market volatility means a return to normal conditions, which does not cause fear, as the country's banks are well prepared for the current market fluctuations.
Yesterday an interesting report of the IW research institute was also published. It says that Germany's economic growth will slow down this year. However, due to strong domestic demand and demand from other countries, the German government does not have a serious cause for concern. In IW, it is expected that GDP in real terms will grow by 2% in 2018, after an increase of 2.2% in 2017. The main fact of the decline in growth will be related to the 1st quarter of this year when the eurozone economy showed a slowdown after the excellent results for 2017.
Data on the growth of companies' commodity stocks in the U.S. did not have an impact on the US dollar in February. According to the report, inventories of companies increased by 0.6% compared to the previous month and amounted to 1.929 trillion US dollars. These data fully coincided with the forecasts of economists compared with February 2017, whereas inventories increased by 4%.
The confidence of home builders in the U.S. declined in April. According to the report of the National Association of Housing Developers, the leading index of the housing market fell to 69 points in April 2018. Economists expected the index to be 70 points in April.
