The single European currency persistently went up, despite the slowdown in retail sales growth from 2.0% to 1.5%. This is against the background of a significant slowdown in inflation. They showed an increase from 52.8 to 52.9 instead of a decrease to 52.5, although the final data on the business activity index in the service sector pleased investors, as shown by a preliminary assessment. Yet all the same, data on business activity indices raise many questions since the production index decreased from 47.9 to 47.7, while the composite index of business activity rose from 51.5 to 51.8. It is completely incomprehensible how this is possible since it contradicts all the laws of logic, but Markit gave exactly such results. The British business activity index rose from 50.4 to 51.0. But still, business activity indexes are not so significant to have such a significant impact. Thus, it seems that everyone was preparing to publish ADP employment data, since it was at the time of their release that the dollar began to weaken at double speed. After all, these same data showed that employment grew by only some 27 thousand versus 275 thousand in the previous month. However, almost immediately the dollar began to rapidly regain all its losses and it was even able to strengthen itself by the end of the day. Yet, the final data on the business activity index in the service sector confirmed the fact of its decline from 53.0 to 50.9. In this scenario, it is not surprising that the composite index decreased from 53.0 to 50.9. And looking at all this, it is completely incoherent, from which the dollar began to grow so fast in the second half of the day.
However, everything falls into place if we remember that a meeting of the European Central Bank will take place today. After which, Mario Draghi will hold a press conference. It is worth noting here that the Federal Reserve System has unambiguously hinted at the possibility of lowering the refinancing rate and a similar opportunity is also being considered by the Bank of Japan. Recently, analysts of one of the largest banks in Europe said they expect the resumption of the quantitative easing program at the very beginning of next year. Moreover, the demand for futures to lower the refinancing rate of the European Central Bank began to grow in early 2020. Thus, Mario Draghi is now waiting for statements about the imminent turn in the policy of the European Central Bank towards easing monetary policy in order to stimulate the European economy, which really didn't perk as a result of an incredibly soft policy combined with the implementation of a large-scale quantitative easing program. It is with such thoughts that everyone is waiting for today's performance of Mario Draghi. Now, everything depends on his words. The head of the European Central Bank can both bring down the single European currency and breathe new life into it.
After a sharp descent, the euro/dollar currency pair slowed down around the value of 1.1220, forming a pullback. In analyzing the incoming information background, it is likely to assume a temporary talk in the range of 1.1220/1.1250, where traders occupy a waiting position.
The pound/dollar currency pair has drawn a similar picture in the form of a sharp decline in the area of the value of 1.1280. It felt temporary support and slowed down as a fact. It is likely to assume a temporary bumpiness of 1.2675/1.2705, analyzing the existing borders for a breakdown.
