The US Dollar moved flat. That happened in early Europe trading on Thursday. It was continued to sell around the lowest position in two weeks after the Fed’s leader, Jerome Powell, said that the accommodative monetary policy needs to be kept.
It is especially for several periods in the future. The index of the Dollar which tracks Greenback to the other six currencies was up. That was for about 0.1% in 90,406. Before, it fell to the level of 90.249. It was the lowest level in two weeks.
That especially happened on Wednesday. The USD / JPY increased by 0.1% and reached the 104.66. Meanwhile, the EUR / US were also up and became 1.2129. Meanwhile, AUD / USD which is sensitive to risk increased 0.3% became 0.7741.
The Statement from Powel
Jerome Powel as the leader of the Fed said on Wednesday that the patient accommodative monetary policy attitude is so important. That is crucial to rise the whole economic and market after the stuck happened lately.
He stated that in the moment of ‘The Economic Club of New York’. Some famous names can be seen lately. Those are like Oliver Blanchard and Larry Summers who have started to warn about the United States risk of economic overheating.
Some factors can really affect it. However, the strongest one is that the stimulus plan which is created by Joe Biden. Many people know that the new President of America has a plan to give $ 1.9 trillion stimuli as an effort to recover the economy.
However, Powell said that the strong employment market is not only becoming a trigger to make the monetary policy tighter but also more than that. The loose monetary attitude view happened in a long time is also supported by the US inflation data.
The Disappointing US Inflation Data
The inflation data of America is disappointing like what was reported in some updates. The CPI core is flat on February and it is only growing by about 1.4% this year. The main economy release in the United States on Thursday is in the weekly early claim.
It is known from the information that the market participants will find the update around the employment market. It is especially after the setbacks that happened in December caused by the second pandemic wave which brings so many effects.
That situation forced many businesses to be closed. Elsewhere, the GBP / USD increases and becomes 1,3831. It reaches the highest level in these 3 years. This situation is supported by the decreasing expectation for the negative interest rate.
That happened in England. Why? It is because the vaccination program in that country is going quite smoothly. It seems that the vaccination will bring positive effects for various sectors such as the economy, social, financial, and so on.
Problem for Sterling
However, there may be some problems for Sterling so far and next in the future. It is because of the tension between England and Saudi Arabia. That condition is now increasing again because of the part of the deal that covers Northern Ireland.
The European Union rejects the UK’s call to set back the relationship between those two parties. That was stated on Wednesday night. It is especially after England asked to delay the rules of border check for any goods entering their places.
That is the impact of dispute. It is when the commission decided to trigger an emergency clause in the divorce deal of Brexit. That effort is for curbing the vaccine exports to Northern Ireland. Many other updates also happened in the market.
The Bank of England Governor, Andrew Bailey also accused the EU in his speech about the double standard. That is in withholding "equivalent" regulatory status for UK financial services. Many analysts still pay attention to that topic until now.
