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12.11.2018 03:49 PM
The program "Strong America - Strong Dollar" in action

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The US dollar rose last Friday to its 16-month high against the euro, as the fall in stock prices forced the US Federal Reserve to confirm its position on tightening monetary policy, citing a strong US economy.

Thus, the dollar is still perfectly able to use any positive and even negative in its favor. Whether it is a trade war between Washington and Beijing, a significant decrease in the US stock market or mixed results of the mid-term elections.

However, the market received a very clear signal that, in any event, that threatens the dollar, the Federal Reserve, which, after Janet Yellen's departure, is under the control of the White House, will make it clear that it will increase the rate if requested "Strong America - Strong Dollar". Making allowances for this approach, analysts advise traders who work with dollar "longs" to increase their positions, since the risk of a dollar collapse is extremely low. In addition, the dollar has practically protected itself from losing the common European currency in the coming months, since Brussels is still not able to solve three key problems that threaten the euro exchange rate as well. Firstly, this is a prolonged Brexit deal on the Irish border. Secondly, this is a deficit budget of Italy, whose problems are not simpler than the Greek, and the economy is 10 times larger, and, thirdly, this is a migration policy that threatens Europe no longer unemployed Arabs, but a political split. All this will pull the euro down at least until February 2019.

Fedor Pavlov,
Analytical expert of InstaForex
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