Overview of the foreign exchange market on February 6, 2019

The dollar continues its steady climb, which is a combination of several factors at once. It was not without Brexit, around which disputes and other scandals do not subside. Theresa May is once again sent to Brussels to negotiate with Jean-Claude Juncker, who is already tired of repeating to her that the existing version of the agreement, which does not suit the British parliament, is final and will not be changed. It should be recalled that the Minister of Commerce of Great Britain recently swore that he was about to sign separate trade agreements with each of the countries of the European dormitory that he would relieve parliamentarians' concerns about the border between Ireland and Northern Ireland. But for a strange reason, the ministry remains silent. In other words, the United Kingdom is in an extremely inconvenient position, since, in fact, it was imposed on such a withdrawal from the European Union, which not only does not take into account the economic interests of Great Britain, but also threatens its territorial integrity. And there is no turning back, because voters will not understand such a turn. The politicians themselves are still planning to continue their political career, which brings them not modest welfare. The moral of this story is that when you put such serious questions to a vote, you need to convey to the voters the information in full, explaining all aspects of this issue, including those that do not lie on the surface. Although there is an option that the British political class itself simply did not know about the pitfalls. So investors have something to fear, since politicians do not understand what they are doing.


Another factor in the strengthening of the dollar was European statistics, especially retail sales data, which, although they turned out to be better than expected, are not particularly encouraging. Indeed, the growth rate of retail sales slowed from 1.8% to 0.8%, although they expected a slowdown to 0.5%. Nevertheless, there is almost a two-fold slowdown in growth rates, which is unlikely to please anyone. Against this background, even the final data on business activity indices were of little interest to anyone, although they did not coincide with preliminary data. Thus, the business activity index in the service sector remained unchanged, rather than decreased from 51.2 to 50.8, and the composite index decreased from 51.1 to 51.0, and not to 50.7. Similar data in the United States also did not coincide with the forecasts, and although the business activity index in the service sector showed the same results as the preliminary estimate, that is, it decreased from 54.4 to 54.2, but the composite index did not increase from 54.4 to 54.5, but remained unchanged.

Today, neither in the Old World nor in the New World does not come out any serious data, and only regular statements regarding Brexit can affect the markets. Given that the tone of these very statements is constantly changing (sometimes positive with negative, then vice versa), it is likely that the next words of politicians will have a more beneficial effect. Beneficial for the pound and the single European currency. If, however, someone decides to say something. But even without this, given the confident strengthening of the dollar for several days, a local correction suggests itself, and the calm information background does not contradict this.

So we can expect the growth of the single European currency to 1.1400 - 1.1425.


The pound should also grow, to about 1.2975 - 1.3000.


The material has been provided by InstaForex Company - www.instaforex.com