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17.09.202111:47 Forex Analysis & Reviews: The finest hour of USD: the main thing is to beat the euro

Exchange Rates 17.09.2021 analysis

By the end of this week, the US currency managed to bypass the European one and gain a foothold in the leading positions. However, the triumph of the greenback may be short-lived, experts warn.

On the evening of Thursday, September 16, the "American" rose sharply against the background of unexpectedly high retail sales volumes in the United States. Recall that they have increased significantly in America, despite the decline in car sales against the background of a shortage of components and logistics problems. According to impressive reports, in August, the volume of retail sales in the United States soared by 0.7%, although experts expected a decrease in this indicator. As for basic retail sales, except for cars, they rose by 1.8% m/m, contrary to forecasts of a reduction in this indicator.

According to Gus Foch, a leading economist at the analytical company PNC, a high level of consumer spending in the United States will help the national economy recover. According to the published report, the country has recorded steady economic growth. In the last summer month, the lion's share of purchases among American consumers fell on online shopping. However, purchases in retail stores were also among the leaders.

Note that retail sales in America are a significant part of consumer spending, which makes up 2/3 of GDP. Experts consider this indicator very important since it demonstrates current trends in the economy. Earlier, currency strategists at JPMorgan Chase bank lowered the forecast for US GDP growth in the third quarter of 2021 to 5% per annum. Recall that the previous figure was 7%. However, it has significantly sunk against the background of declining demand and difficulties in the US manufacturing sector, especially in the automotive industry.

Despite the relative optimism, currency strategists urge investors to be cautious. According to experts, now the market is dominated by "bearish" sentiment. It should be noted that the "bears" have become more active in the most important sectors and are not going to give up their positions. It is most noticeable when analyzing the dynamics of the EUR/USD pair. On Thursday, September 16, the pair was moving near its 50-day moving average. Any attempts at intraday growth ended in large-scale sales. It did not allow the European currency to gain a stable foothold above 1.1800. On Thursday evening, the euro fell to 1.1765. The next day also did not bring positive results to the single currency. On the morning of Friday, September 17, the EUR/USD pair was trading near 1.1770, making unsuccessful attempts to get out of the current range.

Exchange Rates 17.09.2021 analysis

The upcoming two-day meeting of the Federal Reserve, which is scheduled for next Tuesday and Wednesday, September 21-22, provides significant support to the greenback. Market participants expect it to clarify the upcoming curtailment of the bond purchase program. The tension of the situation is reinforced by the uncertainty of investors regarding further manipulations with the dollar. At the moment, the focus on profit-taking with growth prevails in the markets. It is happening against the background of the rise in the price of the greenback. According to analysts, "bears" on stocks and "bulls" on USD took a wait-and-see position on the eve of new decisions of the Fed.

Larisa Kolesnikova,
Analytical expert of InstaForex
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