The index of dollar has been slightly increasing in the Thursday sales yesterday. However, it touched the bottom line of its consolidation range around 91.00 at the beginning of the European session in Friday.
Greenback is also hit to the Australian dollar, Poundsterling, and some other major currencies. This situation happened in line with the weakening of yield obligation of the USA government.
The 10Y US treasury yield obligation felt again to the level of 1.56 percent. In the other side, some Wall Street stock also declined because Joe Biden declared the plan to increase for the tax.
The new proposal from Biden expressed the increase of tax. It is especially for the marginal salary from 37% becomes 39.6%. There is also a double of tax value for the capital gain for those with the more than 1 billion USD.
The Announcement Shakes The Investors
The announcement made by Biden shakes the investors sentiment so that it breaks down the equity and push usd in the new York session yesterday. The order for USD in a short-term will be supported by safe-haven.
That is related to the increasing number COVID-19 victims in India. The Fed’s dovish attitude and the continuous global economy recovery. It is potential to weight on USD for a long time.
The American employmen data released yesterday still shows the economy recovery. The initial jobless claims only increases by 547k last week. It is lower than the consensus estimation
The estimation is for about 617k or the increase of 586k last week. The continuing jobless claim also decreased up to 3.764 million from 3.708 million. Unfortunately, that won’t change anything.
The Fed Will Still In Its Decision
Any types of data will not able to change the Fed’s decision to maintain its loose monetary policy. That is in the form of the massive quantitative easing and the interest rate which is clearly zero.
In the middle of that low interest rate expectation until many years ahead, the yield obligation from the American government and the US dollar interest rate is underpressured. Another thing also happen.
On Friday, the Japanese statistic institution published the yearly inflation data which increased from -0.4 percent became -0.2% in March. Menwhile, the core inflation was also rising.
Those are from -0.4% becomes -0.1%. That is still in the deflation zone. However, the Japanese inflation increase last month was quite satisfying in the middle of economic which try to recover.
The Market Demand Is the Cause
The situation above is caused by the market demand. However, the analysts predicted that the inflation trend will decreased again in April because the increse of corona cases happened lately.
That becomes a challenge for the BOJ policy making and find the way to reach the target. The data release in Japan was quite satisfying to give the added power for Yen to be stronger against USD.
The USD / JPY pair that time was around 107.94. That was 0.01 percent weaker than the from the daily open price. Generally, yen gets the advantage from the dollar weakening happened since April.
The Investors Consider the Action
Nowadays, the investors are considering about what steps that will be announced by the Fed in its statement release next week. The analyst predicted that Jerome Powell will repeat the Lagarde statement.
He stated that tapering is too early to do. The coronavirus vaccination program which is too wide and the better economy prospect is a strong reason to make a bullish attitude.
However, a rumor about tapering delay by The Fed will weight on the US dollar movement in the future. The bigger trend for dollar is still so varied. Dollar still has a chance to be stronger again.
