The correction in the major currency pair failed; bears are pushing the pair towards new lows.
On Wednesday morning, EURUSD is back to falling after a slight rebound. The current quote for the instrument is 1.0903.
There were no important numbers for the USA and the Euro Area in yesterday’s macroeconomic calendar, that’s why investors were mostly focusing on what head of global central banks had to say.
The US Federal Reserve Chairman Jerome Powell spoke in the Congress. He was quite optimistic is his comments and said that the country’s economy had been improving for the last 11 years. Key reasons for this were a stale employment market and a growing GDP. Among possible risks, Powell named the Chinese coronavirus and concerns relating to the country’s GDP growth in the long-term
According to Powell, under current conditions, there are no solid reasons for revising the regulator’s monetary policy. It means that the Fed’s interest rate may stay in the range between 1.50-1.75% for a long time.
As for the labor market, Powell’s comments were pretty interesting. For example, he said that the employment change was higher than necessary. However, employers change their approach and choose to hire less-skilled people and train them in the course of the works. Ethnic and race issues are still a risk in the sector. Historically, the issue turns out to be much more complicated than it was thought before.
However, no matter how stable the employment market is, labor productivity was pretty low at the time of economic growth. It may reduce corporate profits and, for example, force enterprises to monitor parameters of capital expenditures.
The Fed’s stable stance is a good signal for the USD.
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.