The index of USD which measure the power of dollar to other six different currencies are sold around 9.23. It is especially when this news was written on Wednesday. The analysts thought that this thing is caused by the profit-taking action in the quarter change.
Furthermore, it is also caused the declined of 10Y US treasury obligation decline. US dollar has been appreciated since the beginning of this year together with the increasing yield obligation in America. The investors expectation is one of the supporting factors.
They expect that the American economy recovery can be done faster in line with the implementation of the COVID-19 vaccination there. However, the 2.5% achievement reached by dollar at the first quarter make the investors want to do the profit-taking action.
US Yield Obligation Position Is Quite Far
The profit-taking situation done by the investors are started in the second quarter. Meanwhile, the American yield obligation is known too far away from the highest record. That is why; USD is weakening. That situation made the investors are not sure about a thing.
They want to know whether the dollar weakening up to the low level for three weeks like this can be managed to continue or not. According to some people, now is not the right time to say that dollar is in a declining trend. It is more like the fading support to that currency.
That is why; it goes to certain level. Commonly, the USD movement to its major rivals today is quite small, except versus Euro. The single currency is looked win to dollar because it is supported by the EuroZone economic dates which is increasing based on a report.
The EUR / USD increased by 0.13% to 1.1885 when this news was written. It continues the rally since three days ago. Yesterday afternoon, the final EuroZone PMI service was reported increasing in March. The service business activity index in that area is also rising.
The Data of Service Business Index
Based on the data, the index increased by 45.7 in February and became 49.6 in March. That data is also higher than the 48.8 flash expectation. Unfortunately, that EuroZone PMI service is still in the category of contraction. The EUR/USD is not becoming a trend yet.
In the future market will check on the FOMC report that will be released some hours from now. Based on an analyst team, the hawkish signal can be happened although the possibility is not too large. That is why; USD has a chance to be stronger again.
Elsewhere, Pound Sterling is stuck around 1.3825 to the American dollar in a Europe sales session yesterday after the survey released by Purchasing Manager Index. It is especially from the service sectors and the disappointing merge. However, IMF has its own prediction.
They thought that the economic growth in England will be better than United States and EuroZone. The IHS reported that the final PMI survey result for England service sector in March was significantly slipped to 56.3 from the 56.8 preliminary data.
The PMI Data Triggers Certain Actions
The slipped down PMI data triggers the spontaneous sell reaction on Poundsterling in the forex market. That is why; the EUR/GBP is increasing and GBP/USD is defending. However, so far this data is not bad at all. IHD markit states their opinion about that.
They thought that the British PMI is still creating a sign of the sharp expansion in the service sector activity. It is because the employment component and new orders are getting stronger amidst the vaccination program acceleration in England lately.
The prices there are also growing really fast in the last three years. Meanwhile, IMF released its newest economic prediction which express the optimism. It is especially for the British outlook in the future. The economy situation in England will grow better than USA.
