Analysis of the American Economy Sunday, June 27

Analysis of the American Economy Sunday, June 27

NFP will change market interest rate expectations.

The US dollar index was unable to continue the uptrend that began after the Federal Reserve's interest rate meeting. Several US Federal Reserve officials have opposed raising interest rates early or withdrawing from the bond-buying program. However, new economic data from the US will be released this week, which could have a greater impact on the US dollar and market interest rate expectations.

The rally of the US dollar index has stopped after entering the resistance in the range of 92.50 units and has entered a neutral phase. The Federal Reserve's expansionary monetary policy will continue. The head of the US Federal Reserve also said that the central bank is in no hurry to exit monetary expansionary policies. The Federal Reserve wants to pursue protectionist policies until the US economy recovers completely. The head of the Federal Reserve in New York has also stressed that the conditions are not right for a change in monetary policy. The US NFP Index will be released this week, and it remains to be seen whether US employment data supports the Federal Reserve's monetary policy.

US employment growth (NFP) is projected to be positive for the sixth consecutive month and the US unemployment rate to fall from 5.8% to 5.6%. Improving the US labor market could benefit the US dollar. In fact, improving the US labor market could force the Fed to pull out of expansionary monetary policy. But if US employment data are weak, market expectations of the Federal Reserve will fall and the US dollar will fall. Poor employment data will mean that the US economy is not performing well and should pursue expansionary and monetary protection policies.

Fundamental Analysis of the American Economy Sunday, June 6

Fundamental Analysis of the American Economy Sunday, June 6

Last week, the US dollar fluctuated significantly in response to the ADP and NFP indices, but eventually the dollar index ended the week at the same levels as at the beginning of the week. The rapid growth of the ADP had prompted investors to expect rapid and strong NFP growth, but this did not happen and investors were disappointed. In fact, with the release of the NFP index, all the growth of the dollar index, which was due to the good report of ADP, disappeared.

Next week, Forex investors and traders will focus on risky events such as the European Central Bank interest rate meeting and the US Consumer Price Index (CPI).

US inflation grew to 4.2 percent last month. The Federal Reserve responded to the report by saying that rapid inflation was still temporary. It remains to be seen how the Fed will react if US inflation continues to grow rapidly. The dollar also strengthened last month as US inflation soared. If the Fed concludes that rapid inflation growth is not temporary and should begin to exit monetary expansionary policies, the dollar will react very quickly and strengthen.