The US market once again received support, despite the strengthening of the dollar

The US currency continued its decisive offensive on the global currency market on Wednesday, adding 0.5% on the USDX index. In total, during this mini-rally since April 17, growth has exceeded 2% and sent the dollar to the highs since January. Strengthening is connected with the growth of interest rates, which makes purchases of dollar debt securities more attractive in comparison with analogues from Europe and Japan. In particular, the attractiveness of rates for further weakening of the USD is reduced: the interest for servicing this deal has grown, while the rate has not been able to update the lows.
The EUR/USD failed yesterday in the second half of the day below 1.22, touching on the lows of the 1.216 level, which was not seen from the middle of January. At the same time, US stock markets once again found support on the approach to the 200-day average. As a result, the main indices managed to demonstrate a small strengthening on the basis of the environment, and futures a little more (+ 0.2%) added at the start of trading on Thursday. Thus, the US stock markets can not yet cross the line, which is considered a signal for a serious sell-off.

What is the reason for the dollar's depreciation?

In the shadow of the meteoric growth of US indices this year, the dollar declines faster and more than many analysts have predicted.
The dollar lost nearly 10 percent in the past year, which was its worst performance compared to other major currencies since 2003. Instead of changing its trend, however, in a state of growth in the US economy and a rise in interest rates, the dollar continued to decline in the new year 2018.
The decline in the dollar happened not only at a time of new record growth in US indices, but also in an environment of rising interest rates on 10-year bonds to their highest level in three years.
At the same time, interest on short-term loans rose to its highest levels since 2008. All of this should support a strong dollar. Instead, however, we are witnessing a continuing decline for "green money".
According to some experts, the tax incentives are the reason for this. While they are extremely good for stock markets, the rise in the US deficit increases interest rates on government bonds, and leads to the sale of debt securities.
The repatriation of capital by US companies, back to the United States, has triggered a depreciation of the dollar.
The rise in the US deficit has led the country to finance it with loans from other nations. This reduces the value of the dollar.

The dollar with the fifth consecutive daily decline

The dollar fell on the first full day of the new year 2018. The US dollar index hit its fifth consecutive day-to-day drop, reaching nearly a three-month minimum. Traders are trying to predict what the Fed's interest rate policy will be in the new year.
Given that they sent the dollar down, investors are clearly not convinced that we will see three US interest rates hikes this year. Such an opinion can certainly be said to be the bond markets as well.
The dollar index lost 0.3 percent to 91.836 points or its lowest value since September. The index lost 9.9% of its value in the past year, experiencing its worst year since 2003.
The euro rose to 1.2060, versus 1,2006 late on Monday. Thus, the single currency is traded at levels unseen since September last year.

The dollar fell after Trump fired Attorney General

The dollar has fallen in price on Tuesday during the Asian trading session, after yesterday the US president Donald Trump fired the Acting Attorney General Sally Yates, who ordered the Ministry of Justice lawyers not to embed Trump's ban on immigration, and the Bank of Japan left policy unchanged, as expected, but raised its forecast about growth.
Trump has appointed Dana Boente, Attorney for the Eastern District of Virginia, to the position of Yates, the White House press secretary Sean Spicer wrote on Twitter.
USD/JPY was trading at 113.56, down by 0.18%, while AUD/USD rose by 0.13% to 0.7565. The US Dollar Index, which shows the strength of the dollar against the trade-weighted basket of six major currencies, fell by 0.08% to 100.34.

Comments from Fed officials reduced the depreciation of the dollar

The dollar managed to recover some of its lost positions, supported by the comments of some members of the Fed. On Friday morning the dollar fell more than one percent.
Kaplan and Harker, two presidents of the Fed expect the central bank to raise interest rate three times this year. Meanwhile, Evans believes that the US central bank will raise interest rates twice this year. A positive signal came from the data on applications for unemployment. For the week ending on January 7 their number is 247 000. The expectations of analysts were for 258,000.
Despite the positive news the dollar failed to get out of negative territory and finished the day with a decline. The dollar index slid by 0.4 percent to 101.19 points.

The euro rose, the dollar was down in the last trading session of 2016

The euro jumped to a maximum of three weeks on weak trading on Friday, but is preparing to drop on expectations that the policy of the United States President-elect Donald Trump would fuel inflation and accelerate the increase in Fed rates.
By by the end of the last day of trading in 2016, the dollar index slowed by 0.3 percent to 102.380, below the peak of this year of 103.65, reached on December 20 - the maximum value since January 2003. However, at year-end it added 3.8 percent.
The euro rose by 0.4 percent to $1.0518 after a brief recovery to $1.0700 - the highest value since December 8. During the year the euro fell against the dollar by 3 percent.

US bulls with new rally

The US dollar continued its bullish run after the Fed raised interest rates. The greenback reached its strongest level in 14 years. For the last three months the dollar index rose by 3%, and for the last 4 months - by nearly 10%.
USD/JPY passed the barrier of 118 and now investors expect next target of 120, so as parity of EUR/USD. Janet Yellen gave a forecast for the new three raises of interest rates next year. This to some extent would lead to major problems for central banks around the world, including higher costs for debt service, higher inflation and falling of exchange rate. Emerging markets were hardest hit by capital outflows in search of higher yields and higher costs for servicing of dollar-denominated debt. In combination with the weak euro, yen and other major currencies this may have negative effects on the world and lead to slower growth, which will eventually overtake also the US economy.
Currently the strong dollar poses a major risk for the US economy, especially in terms of raising interest rates in the country. If the administration of Trump did not come quickly with a major fiscal stimulus package, the euphoria will fade and this will be the beginning of fluctuation for the US economy.

Dollar at 14 years peak after the Fed's decision to raise the rate

The dollar reached 14 years peak to a basket of major currency rivals on Thursday after the US Federal Reserve has increased the number of expected rate increases in 2017, reviving lasted for a month rally and hitting the currencies of emerging markets.
The US Federal Reserve raised its key interest rate by a quarter point and indicated to accelerate the increase in the cost of borrowed funds in 2017 after promises of President-elect Donald Trump to spur economic growth with tax cuts, increased spending and deregulation.
The range of federal funds rate has been raised to 0,50-0,75 percent as expected by financial markets, however, the signals that the Fed could raise rates three times in 2017, instead of two, as expected in September, seems to have caught them by surprise.
By 5.53 GMT the dollar index to continued rally and rose by 0.57 percent to 102.32. It touched the mark of 102.620, the highest since January 2003. Euro fell by 0.3 percent to $ 1.0503 after falling to a minimum of 21 months to $ 1.0468.
Dollar on Thursday struck a 10-month high against the Japanese yen, reaching 117.860 yen, rising by 0.3 percent to 117.50.

Dollar once again attacking highs

On world markets the dollar once again attacking highs: against the euro the US currency reached a mark of 1.054, while the dollar index rose to new multi-year highs.
Published data on reserves and production of oil in the United States did not changed the situation significantly: oil quotes reaction was mixed, but in general the price of oil in the first minutes remained in a narrow range of $49,20-49,40 per barrel after statistics. It did not lead to significant fluctuations in the domestic market.
Keeping in mind the outcome of the upcoming meeting of representatives of OPEC in late November, investors continue very painfully to react to any hints in favor of tightening of US interest policy.
USD/JPY easily overcomed 111.00 level and is now heading to new highs.

The dollar is growing, but may show weekly decline

The dollar strengthened on Friday, but may show weekly decline against other major competitors, as investors doubt the possibility of raising the Fed rate in the current year.
Major currencies traded in narrow ranges, except for the Australian dollar, which dipped 0.9 percent as ratings agency Moody's downgraded the ratings of Australian banks.
Market's attention this week has been mostly focused on the mixed signals by the US Federal Reserve. Minutes of the last meeting of the regulator showed on Wednesday that the Fed heads view on the imminent rate hike has divided.
"The market generally believes, that the Fed will not raise rates in the near future, therefore the dollar in the short term remains vulnerable." - Said Lee Hardman of Bank of Tokyo-Mitsubishi.
The dollar index, which tracks the currency's value against a basket of six major currencies, to 12.28 UTR rose by 0.38 percent to 94.517, but shows weekly decline. Thursday's index slipped to 94.077, the lowest level since June 23.
Euro fell by 0.29 percent to $ 1.1320, for the week strengthened against the US currency, the yen fell by 0.41 percent to 100.28 on Tuesday after reaching a maximum of eight weeks at 99.55 yen.

Fed's minutes did not brought new ideas

The reports, published yesterday from the June's meeting of the Fed did not brought new ideas on the market. The general conclusion is the following - the uncertainty after the British referendum is maintained, failing data on the labor market in the last month are likely to be a single event, but the attention to statistics in the coming months will be very significant.
Tomorrow will be published labor market data for June, and, according to the consensus forecast, the statistics will be released in a moderately positive manner. Consensus at the moment suggests that there have been generated about 175 thousand new jobs in June, the unemployment rate during this period increased from 4.7% to 4.8% (which is not a problem, after an unexpected decline by 0.2% last month), dynamics wages remained at the level of the previous reporting period. Such statistics would be an evidence that the US economy is relatively healthy, and the labor market is feeling ok.
Tomorrow's statistics will be important for the US dollar in the currency market. The dollar index significantly added value after the publication of results of the referendum, and then within a few days demonstrates consolidation. If the labor market statistics will be positive, the dollar index may try to form another boost up, and the breakthrough of local maximums at 96.90-97 area may give a signal for growth to 98-98.50 area.

The Australian dollar rose after the central bank meeting

The Australian dollar rose after the meeting of the Australian central bank, which left interest rates unchanged. The institution did not take changes in monetary policy, leaving the base rate unchanged at a record low of 1.75%. The Australian dollar was among the best performing currencies after hitting 0.7458 - the highest level since May 6. The Australian currency rose one percent against the euro and the yen.
The British pound managed to recover after reaching earlier 3-week low against the dollar. The reason for the good performance were two polls that give priority to the supporters to remain in the UK in the EU. This is in contrast with the results of Monday when the majority of respondents supported the country's exit from the EU. The British pound rose one percent against the dollar, reaching 1.4574. Investors and politicians warned that the eventual exit of Britain from the EU could hit the global economy and financial markets.
The dollar teetered about its direction around the 4-week low as investors speculated about when will be the next increase in interest rates.
The dollar index, showing the performance of the greenback dropped to 93.874, holding near 4-week low at 93.745.