Analysis of the American Trading Session
Trading on the US session on Monday closed with the growth of the US dollar against the basket of major competitors. The reason for this dynamics was the technical correction in the oversold American dollar and some fundamental factors in Europe, which became a catalyst for the movement.
So, the optimistic but restrained comments of the head of the ECB Draghi contributed to the weakening of the euro against the dollar, mainly due to soft rhetoric and the data that the ECB doesn’t hurry to tighten monetary policy in the euro area. Additional support for the American dollar was caused by the collapse of the pound on the resignation of the second minister in the UK, who earlier supported an exit from the EU. At the same time the pound quickly recovered from the data that the personnel reshuffle wouldn’t influence on the parliament efficiency.
As a result, the US dollar index significantly adjusted, thereby slowing the downward trend.
The US dollar index. The current price is 94.10 (10-year government bonds yield is a blue line)
Read also: “The fundamental analysis: the interest rate and its impact on the exchange rate.” 1/2 “
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Andre Green