Forex: The Dollar Is Yet To Pick Up Despite Positive Economic Indicators
By TLB Contributing Financial Writer: Andrew
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In addition to opening a demo trading account, it is important to observe the market indicators in order to gain experience about the market. Recent market insights have shown that the performance of the dollar in the forex market is uninspiring despite recent reports of a strengthening economy. The dollar performed inadequately in the market compared to other key currencies. The interest in the currency was generally low and it seems like this will continue well into the new month. The recent reports have been showing that the economy has been undergoing a consistent growth and this was expected to boost the dollar’s fortunes in the market. The rise of the dollar at the market was so insignificant that it could barely translate to anything meaningful.
The economic growth is in line with previous forecasts
A host of measures used by the government to measure the performance have also shown similar growth results. The inflation indicator has for instance shown a rise in inflation for the past few months. The Personal Consumption Expenditures (PCE), a price index that is preferred by the government to measure inflation, has shown that the inflation has risen by about 1.2% over the last one year. This revelation confirms the predictions that analysts had during the period. The price index excludes commodities like food and energy.
The inflation levels are expected to hit 2%…
This is at least what the Fed expects will happen. There have been measures put to keep the expectations reasonable. Analysts say that a constant increase of rates will more or less achieve the Fed’s target over the year.
Most sectors of the economy showed an improvement
At the Department of Labor, recent news has not given speculators any reasons for concern. In fact, the targets set by the government have been met successfully. The department reported that jobless rates have dropped to 215,000, a much better figure compared to the forecast 230,000 by the month of March.
On the consumer front, the news has also been positive for the most part. The reports coming from the consumer end show that it has risen in the last month by 0.2%. This rise is in line with what economists have been hoping for. Consumer spending is a huge part of the economy as it accounts for up to two-thirds of the entire economic movements of the US economy.
On the international currency end, the recent geopolitical movements have had a significant impact on the market. The recent agreements between the Chinese and North Korean leaders have specifically had a bearing on the currencies. The Yen has for instance put on a strong comeback because of the positive indicators on the political front. This has, in turn, affected the USD/JPY pair by pushing it down in the market.
Performance of other currencies
Other currency pairs also experienced a slight drop…
The market generally saw the dollar failing to exhibit the same improvement that has been experienced in the domestic market. Both EUR/USD and GBP/USD experienced a slight adjustment downwards. This was also the case for the USD/CAD which was also affected by the change in oil prices.
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