The greenback increased further this week. The U.S. currency was supported by comments by Fed officials. Philadelphia Fed President Harker said on Wednesday that that he expected the Fed could raise its interest rate two to three times this year. St. Louis Federal Reserve President James Bullard said on Monday that low interest rates for a longer period could lead to financial instability in future.
Market participants are awaiting a speech by the Fed Chairwoman Janet Yellen later in the day. She will speak at Harvard University. Market participants hope for hints for further interest rate hikes. "Hawkish" comments will support the U.S. dollar.
I still think that it is unlikely the Fed would raise its interest rate ahead of the referendum on Britain's membership in the European Union (EU) on June 23 as Britain's exit from the EU would have a negative impact on the U.S. economy.
If the U.S. economy continues to recover from the weak first quarter, the Fed could raise its interest rate soon. But there is no significant improvement. Markit Economics' preliminary manufacturing and services purchasing managers' indexes (PMI) dropped in May. Markit Chief Economist Chris Williamson said that it seemed it was unlikely the U.S. economy would rebound in the second quarter.
Oil prices remained supported this week. Oil prices were driven by a further decline in oil output in the U.S. and by supply disruptions in Nigeria and Canada. Market participants are awaiting the OPEC meeting on June 02. But it is unlikely that the OPEC would decide to freeze or to cut its oil output.
It is likely that the currency pair EURUSD will rise toward the high of May 23 at $1.1242 or the psychological level at $1.1300, if there are negative news from the U.S. and there are no negative economic data from the Eurozone.
If the U.S. economic data is better than expected and in case of the negative economic data from the Eurozone, the currency pair EURUSD may test the psychological level at $1.1000.
Risk Warning: Trading Forex and CFDs on margin carries a high level of risk and may not be suitable for all investors. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.72% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Prior to trading, you should take into consideration your level of experience and financial situation. TeleTrade strives to provide you with all the necessary information and protective measures, but, if the risks seem still unclear to you, please seek independent advice.
© 2011-2022 Teletrade-DJ International Consulting Ltd
Teletrade-DJ International Consulting Ltd is registered as a Cyprus Investment Firm (CIF) under registration number HE272810 and is licensed by the Cyprus Securities and Exchange Commission (CySEC) under license number 158/11.
The company operates in accordance with the Markets in Financial Instruments Directive (MiFID).
The content on this website is for information purposes only. All the services and information provided have been obtained from sources deemed to be reliable. Teletrade-DJ International Consulting Ltd ("TeleTrade") and/or any third-party information providers provide the services and information without warranty of any kind. By using this information and services you agree that under no circumstances shall TeleTrade have any liability to any person or entity for any loss or damage in whole or part caused by reliance on such information and services.
TeleTrade cooperates exclusively with regulated financial institutions for the safekeeping of clients' funds. Please see the entire list of banks and payment service providers entrusted with the handling of clients' funds.
Teletrade-DJ International Consulting Ltd currently provides its services on a cross-border basis, within EEA states (except Belgium) under the MiFID passporting regime, and in selected 3rd countries. TeleTrade does not provide its services to residents or nationals of the USA.