The U.S. Dollar, FOMC minutes, German PMI Data, the Euro, the EUR/USD, with the Analysis and discussion Points
- The dollar may rise after the FOMC minutes were released – what did secretary Powell say about the key metrics to monitor?
- The Euro could undergo in advance of the publication of the consumer confidence and the German PMI statistics
- The EUR/USD is on the side of the price action may soon be at its end, which is the directional bias?
In The Asia-Pacific Region European Commission
The focus on the growth of the New Zealand Dollar against its G10 counterparts while the anti-risk Japanese Yen has dropped. US stock futures jumped higher, with the Asia-Pacific region stocks, indicating investors are feeling celebratory, from the beginning of the session. The people’s Bank of China (PBoC) announced that it was holding its 5-year and 1-year Loans at the Prime lending Rate, unchanged at 4.65 and 3.85 percent, respectively.
The Dollar Can rise on the FOMC Minutes
The US Dollar could take place after the minutes of the 28-29 April FOMC meeting are released. The text itself is likely to wear a dark shade as the global economy struggles with the biggest economic shock in living memory, to quote the President of the Federal reserve, and Jerome Powell. It is difficult to know how the content can be given that the incredibly unstable situation around the corona virus, the pandemic continues to move the global policy landscape.
That said, one of the nuggets of gold analysts and decision-makers will be very scan will be mentioned on the use of negative interest rates. Recently, there was largely in currency speculation, the authorities should consider experimenting with a sub-zero policies. And When these rumors became reflected in the overnight swaps indexed to, the us $ has fallen.
However, Secretary Powell has made it clear that the monetary authorities are not looking to use negative interest rates as a policy measure, given its “unclear benefits and costs clear”. Following his comment on the question, the U.S. Dollar jumped. He also said that it is virus-related, medical metrics, are the most important data for the U.S. economy-and-the-most-crucial-to-monitor because of the way in which the policy will be designed around them.
Powell, Mnuchin Witness Highlights
Yesterday, the Fed Chairman Jerome Powell, and the Secretary of the Treasury, and Steven Mnuchin, both testified before the Senate Banking Committee on policies to mitigate the impact of the corona virus of the pandemic. The President has stated that the scope and speed of the current recession, it is a modern, unprecedented, and warned that is-social assistance from the crisis, could weigh on the economy for years.
He added that the Fed will use ” the full range of tools at its disposal to support the economy, but he added that the monetary authorities and the government will jointly inject stimulative measures. That said, Mr. Powell has also said that it was not the Fed’s role is to discuss the timing or the design of fiscal policy. He said that the central bank will not weigh in on issues outside of the scope of its mandate, ii.e. policy.
Having said that, the President has indicated to policymakers that the “question” of whether the exercise of the answer is smart enough to date, has been a “threat” in the air”. The day before the testimony, he said that it was agreed with the unemployment projections, with a peak around 20 to 25 percent, and added that the Fed has no ammo, and do more if necessary.
Mr. Mnuchin added on this at the time of the testimony, warning that the number of jobs is probably going to get worse before they are better. He stated that, in an effort to combat the economic impact, the Treasury has been prepared to provide additional capital and accelerate the loan programs that are created by the Fed. Another determinant factor was his announcement of two of the aid programs will be ready for implementation by the end of May.
Euro Braces for German PMI Data, euro zone, Consumer Confidence
The Euro may face increased of the winding-up of the pressure before the output of the front-German industry, services and composite PMI and euro-zone consumer confidence data. The following published highly watched German ZEW statistics showed that the Present Situation component registering a dismal -93.5 reading, well below the -86.6 estimate. It was the weakest result in a total of 17 years.
As the largest economy in the region, data from Germany typically carries a higher premium relative to the other member states and it is often translated in the most of the volatility of the Euro. Up next, the preliminary euro area consumer confidence data for the month of May is expected to show a -23.8 a print, a little less good than the previous -22.7 reading. Worse than expected could exacerbate the selling pressure in the Euro area.
EUR/USD: Technical Outlook
The EUR/USD could target a formidable challenge to the inflection zone between 1.0981, and 1.0989 after the failure to break above it, in mid-April and early May. Surrender certificate could catalyze a sale and send the pair crashing into the ground at 1.0783. For about a month, with the EUR/USD has traded within these price parameters. A break above or below these bands, with the result that could precede a short-term bullish or bearish streak.
EUR/USD – Daily Chart
The EUR/USD chart-created using TradingView
— Written by Dmitry Zabelin, a Currency Analyst to DailyFX.com
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