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11.02.2019 01:44 PM
Weekly review of the foreign exchange market for February 11, 2019

The dollar couldn't improve its position in relation to the single European currency and the pound. Although in the United States themselves no significant macroeconomic data did not come out. It is difficult to name data on production orders or orders for durable goods, as well as applications for unemployment benefits, are so decisive. At the same time, production orders decreased by 0.6%, while orders for durable goods increased by 0.7%. The number of applications for unemployment benefits fell by 61 thousand. In particular, the number of initial applications decreased by 19 thousand and repeated ones by 42 thousand. In addition to all this, consumer lending amounted to $ 16.6 billion against $ 22.4 billion dollars in the previous month. In other words, there was no serious data. So the matter is both in the European statistics and in the political factors that attract the most attention of the mass media agitation and disinformation. One of the main events was the speech of Donald Trump in Congress. The owner of the White House praised himself for his success in the economy, which, he said, demonstrates the best dynamics in recent decades. The most important thing is that the President of the United States promised to continue to pursue a policy of revising the trade agreements that discriminate against America. If you translate it into human language, the United States will continue to squeeze foreign capital from its market and twist the hands of all other countries in order to receive privileges for its capital in foreign markets. That is, Donald Trump explained to all potential investors, they say, invest your money in the economy of the United States, not in Europe or elsewhere.

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Nevertheless, even without the help of Donald Trump, the single European currency had enough reasons for sadness. The growth rates of producer prices slowed from 4.0% to 3.0%, and retail sales from 1.8% to 0.8%. Not only did the data have more weight than those released in the United States, but they were also purely negative.

In Britain, the epic continues with Brexit, only Mark Carney was able to get away from the discussion of which. Theresa May, following the instructions of the British Parliament, went to Brussels for a new agreement. There she was waiting for a complete fiasco, which the British mass agitation and disinformation tried to present as a victory. Jean-Claude Juncker, expressing his understanding of the concerns of the British parliamentarians, vowed to make additions to the wording of the political declaration, which reinforces the intentions of the parties to constructive cooperation after Brexit. However, given that the time before the UK's withdrawal from the European Union is less and less, and the changes need to be coordinated with each country separately, this will happen not earlier than the UK's eviction from the European dormitory. The head of the European Commission almost swore by blood that the interests of Albion will be taken into account. However, there can be no talk about amending the text of the agreement, which the British Parliament rejected. Europe does not intend to revise the document, which has already been approved by all countries of the European Union. The agreement regulates the obligations of the parties, and the political declaration does not oblige anyone to anything. That is, Theresa May did not achieve anything. Although this was to be expected since European politicians have long been saying that the agreement will not be revised. However, the media agitation and misinformation were able to give it all so that investors were optimistic about the pound. Only after a couple of days, market participants have not received their sight, but have changed their attitude towards the pound itself. It's all about the meeting of the Board of the Bank of England, after which a press conference was held by Mark Carney. The head of the Bank of England is probably the most serious specialist in drafting apocalyptic predictions of what the UK is waiting for after Brexit, and he did not go out of his role. Mark Carney once again scared with incredible risks and consequences of this very Brexit, and also added that in the event of development of events under the worst scenario, it is worth thinking about easing monetary policy. From his words, it follows that there will be no increase in the refinancing rate this year. He also added that the Bank of England lowered the forecast for economic growth rates for the current year. That is, having lowered this very forecast, the Bank of England just proceeds from the worst scenario, and it is worth waiting just to lower the refinancing rate.

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This week, much more macroeconomic data is waiting for us, and, to be honest, the American statistics are causing considerable concern. In particular, inflation should fall from 1.9% to 1.6%, and the growth rate of producer prices from 2.5% to 2.1%, which will finally convince everyone that this year the Fed will not raise the refinancing rate. It is too early to talk about the possible easing of monetary policy, but there is something to worry about. In addition, a further decline in retail sales is expected, which, combined with a slowdown in inflation, is generally a nightmare for investors of all stripes. Yes, and the industry can disobey the orders of its commander in chief, and continue sluggish slowdown. So, American statistics expectations are strictly negative.

It cannot be said that in Europe the opposite hopes, since the growth rate of industrial production, or rather its decline, should only slow down from -3.3% to -3.1%. Yes, and another assessment of GDP growth rates is likely to confirm their slowdown from 1.6% to 1.2%. Nevertheless, the slowdown in inflation in the United States is a much more weighty argument, and the single European currency can rise to 1.1400.

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In the United Kingdom comes a whole heap of statistics, and, as an evil, extremely important. After all, this may interfere with the voluptuous discussion of Brexit. Instead, you will need to make boring conversations about the current economic situation. And because some of the data is already out. Thus, a preliminary estimate of GDP showed a slowdown in economic growth from 1.6% to 1.3%. Investments continued to decline, and their decline slowed down from -1.9% to -3.7%. Only industrial production was somewhat pleased, as the pace of its decline slowed down from -1.3% to -0.9%. Surely, there will be those who are ready to rejoice in such notable achievements of the British industry. We are still waiting for data on inflation and retail sales. Inflation fits completely into the picture of already released data since it should decrease from 2.1% to 2.0%. Retail sales can postpone the onset of the apocalypse, which is predicted by Mark Carney since their growth rates should accelerate from 3.0% to 3.4%. So the forecasts and the results are clearly deplorable. But in the United States is no better. Consequently, if they do not again make a fuss about Brexit, the pound will remain in the area of 1.2950.

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Mark Bom,
Chuyên gia phân tích của InstaForex
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