Reducing the risk of dismissal from the post of the current Federal Reserve Chairman Jerome Powell helped the US dollar regain a number of positions against risky assets, and good retail sales data confirmed once again that the growth rate of the American economy at the end of this year will be very good.
Kevin Hassett, Chairman of the Council of Economic Advisers under the President of the United States, delivered a speech yesterday, stating that there is no danger of dismissing Powell, the chairman of the Federal Reserve System. Let me remind you that recently there were rumors on the market that US President Donald Trump could dismiss the head of the Central Bank from his post.
Hassett hurried to reassure the markets, saying that the US president is only expressing disagreement with the current policy of Jerome Powell, but this does not mean a threat to the position of the Fed chairman. Hassett also noted that the US president does not intend to dismiss the head of the Central Bank.
As I noted above, the data that came out in retail in the United States at the end of this year was the strongest in the last six years.
According to the report, retail sales of goods during the pre-Christmas holidays, excluding cars, from November 1 to December 24 increased by 5.1% compared with the same period last year. Total for this period, the Americans spent more than 850 billion dollars.
As for the real estate market in the US, according to yesterday's report, the growth rate of home prices in the US in October of this year remained unchanged. According to Case-Shiller, the national house price index in October remained unchanged compared with September but increased by 5.5% compared with the same period of the previous year.
However, the report identifies fears associated with high rates and rising housing prices, while American income and wages are growing at a less confident pace. This means that fewer people can afford to buy a home. The housing price index for 10 megacities in October rose by 4.7% compared with the same period of the previous year, while the index for 20 megacities grew by 5%.
Activity in the area of responsibility of the Federal Reserve Bank of Richmond has completely declined.
As indicated in the report, the composite production index of the bank in December of this year immediately fell to -8 points from 14 points in November. Let me remind you that the positive values of the index indicate an increase in activity in the manufacturing sector. Economists had expected the index value in December to be 15 points.
As for the technical picture of the EUR / USD pair, in the short term, there is a demand for the US dollar, which can continue even further if the bulls fail to cling to the intermediate resistance level of 1.1402 today. Returning to support of 1.1370 will lead to a new wave of selling off risky assets, reaching 1.1330 and 1.1270 lows.
The material has been provided by InstaForex Company - www.instaforex.com