The US dollar ignored yesterday's speech by US President Donald Trump, as he talked more about himself than about the economy. Good data on business confidence also allowed the US dollar to maintain its position in the pair with the euro and the pound.
EURUSD
In his speech, which was supposed to focus on economic dynamics, US President Trump welcomed the creation of nearly 7 million new jobs, noting that economic gains have been observed even despite interest rates dropping too slowly. Trump also said that now the United States is competing with other countries in terms of employment, industry, economic growth, and prosperity, while stagnation was normal before he became president. In his opinion, an unprecedented period of prosperity is taking place in the United States, but interest rates should be reduced even more, and remain so for a long period.
The American leader believes that low-interest rates are the solution to all economic problems, although history shows that this is far from the case, which is constantly trying to prove to Trump the acting head of the Federal Reserve, Jerome Powell, whose speech is scheduled for today.
As for trade relations, during his speech, Donald Trump said that no country cheats better than China, placing the blame on the previous US administration, adding that the first phase of the trade agreement with China is close and will come soon. However, trade duties remain the main problem in negotiations. If Washington goes to its mark within the framework of the first phase agreement, this will simplify negotiations in the future. However, a more likely delay will also reduce tension. Let me remind you that the new package of duties will begin to operate on December 15.
As noted above, data on the trust of small business owners in the United States provided little support to the dollar. According to the report of the National Federation of Independent Business NFIB, the optimism index of small business in October this year amounted to 102.4 points, which is 0.6 points higher than in September. More importantly, company owners continued to create new jobs and expand their business. However, a shortage of qualified personnel continues to be felt on the market.
Data from The Retail Economist and Goldman Sachs were ignored by the market. According to the report, the US retail sales index for the week from November 3 to 9 rose by 1.8% and increased by 4.3% compared to the same period in 2018. The Redbook report indicated that US retail sales for the first week of November rose by 0.1% and 5.0% compared to the same period in 2018. For the period from November 3 to 9, sales also increased by 5.0%.
Yesterday, it also became known that the Federal Reserve Bank of New York has once again made an infusion of liquidity in the amount of 111.909 billion US dollars. The report noted that the situation with the lack of liquidity is gradually stabilizing and the need for banks in it has become lower than expected at the Fed.
As for the technical picture of the EURUSD pair, so far the market is on the side of the euro sellers. Bears are waiting for the update of the lows in the area of 1.0990 and 1.0960, which will increase the pressure on risky assets and maintain the current downward trend, which has been observed since November 4 this year. Much will depend on today's data on the consumer price index of Germany and the United States. A weak report will put pressure on the trading instrument in the first half of the day, but if the bulls manage to regain the resistance of 1.1030, the situation may change dramatically, which will lead to an upward correction of risky assets in the area of 1.1055 and 1.1090.
NZDUSD
The New Zealand dollar strengthened against the US dollar after the Reserve Bank of New Zealand left the official interest rate unchanged at 1.0% today.
The fact that the RBNZ is no longer in a hurry to lower rates has supported the New Zealand dollar. The central bank noted the predominance of downside risks for the economy in the short term, so the meeting discussed both the negative and positive sides of reducing the official rate. Although the rate cuts this year have a positive impact on the economy, it takes time for the effect of these actions to be fully manifested. The regulator also noted that monetary policy will remain stimulating for a long period, and if necessary, depending on the economic situation, the monetary stimulus can be increased.
As for the technical picture of the pair NZDUSD, further trade is represented in the side channel. The lower border is seen in the area of major support at 0.6320, while the upward correction will be limited to the upper border in the area of this month's highs around 0.6440.
