Euro\Dollar: the results of last week and the forecast for the upcoming period
Reliable price support was at 1.1620. There is an upward trend from mid-October.
The dollar has shown stability, while an increase in risk appetite around the world has led to the growth of other world currencies. The Japanese yen was trading at a four-year low against the US currency. The European stock market is growing, the US S&P 500 broad market index has updated its maximum, and the yield on 10-year US Treasury bonds has reached its highest level in 5 months, and now it is at 1.638% due to the optimism of the global economy and corporate reporting.
The minutes of the September meeting of the regulator showed that the leaders of the US Central Bank are ready to start curtailing the quantitative easing (QE) program in the coming months and complete it by mid-2022. As a result, expectations of an increase in the base rate have increased, as inflationary pressure increases. The latest data from the University of Michigan showed an increase in Americans' inflation expectations for the medium term (next year) in October to 4.8% from 4.6% a month earlier. But the volume of US industrial production for September came out worse than the forecast and worse than the previous value. The indicator published by the US Federal Reserve serves as a leading indicator of employment in the manufacturing industry, average earnings and personal income.
External market signals are increasingly reviving the appetite for risk. The main Wall Street indices showed growth after the good financial results of Goldman Sachs at the beginning of the week. The banking index rose 0.8% following the rise in the yield of 10-year treasury bonds. Such a news background reduced long positions in gold, thereby canceling the pessimistic mood before corporate reporting.
According to media reports, in order to avoid a formal default, the Chinese developer China Evergrande Group transferred funds to a bank account to pay a coupon on dollar bonds.
Next week will be interesting in the foreign exchange market. In the USA, data on basic orders for durable goods, the volume of orders for durable goods will be released. The focus will be on news with an increased degree of importance – the US GDP for the third quarter, the GDP deflator and the number of initial applications for unemployment benefits will be published.