The US Dollar has no strengths. Overview for 02.11.2017

evening events.

On Thursday morning, the main currency pair is trading a little bit to the upside. The current quote for the instrument is 1.1630.

Another two-day meeting of the US Federal Reserve was over yesterday. The key interest rate remained unchanged at 1% to 1.25%, so investors are expecting it to be increased in December. According to CME futures, the next time the rate is expected to be raised by 25 basis points. However, there are still a lot of questions about the regulator’s future steps.

And here’s why. The Fed believes that the inflation is too weak, and it is weak indeed. In September, the CPI in the USA increased just up to 1.3% y/y, while the regulator’s target is still at 2% y/y, and that’s pretty far away. A successor to Yellen will be announced this evening. In case it’s “dove” Powell with “hawk” Taylor being his deputy, the “fight” for the inflation target and the regulator’s monetary policy will take place every week. It means that both the CPI target and the way how to reach it may significantly change.

Apart from announcement of the new Federal Reserve Chairman, investors are waiting for the taxation reform draft that includes all the planned changes. The Donald Trump’s ambitious taxation reform broke a lot of lances, but almost a year after elections it slowly is getting closer to reality. Response of the USD will be based on which changes Trump’s supporters managed to push through.

RoboForex Analytical Department