Experts warn of a “trap” for the dollar until the end of May

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The dollar exchange rate depends on the behavior of the euro, analysts say.

Evgeny Mironyuk, an expert on the stock market at BCS Mir Investments, in an interview with the media, mentioned the “pitfalls” that the dollar will have to face before the end of May.

Recall that recently the dollar has already reached record highs over the past twenty years, updating highs against other currencies. If some experts believe that the peak of inflation has already been passed, others are sure that not everything is over yet.

Thus, in April the inflation rate was 0.3%, and in March 1.2%, but prices are still continue to grow.

Mironyuk told “Prime”that according to the statement of the head of the Fed (analogous to the Central Bank in the United States) Jerome Powell, rates will increase by 0.5% for each of the federal funds, which will lead to a decrease in the difference in rates with the economies of developing countries and increase compared to the developed ones.

The head of the Fed said that he would not hesitate to support raising the rate above the “neutral” level.

The US also points to the increased attractiveness of the dollar for the so-called carry trade rates, when an investor borrows in one currency at a lower rate and invests in another at a higher rate.

The American expert is sure that the fall of the euro is to blame for the weakness of the dollar.

As Mironyuk clarifies, on May 12, the euro reached 1.05 per 1 dollar, after which there was “a breakdown into a figure” – the quote was 1.0357, which means a fall of the euro by 0.3%.

It is highly likely that the euro will continue to fall in the short term.

According to Mironyuk, before the end of the month, a strong the movement of the EUR/USD pair down and the growth of the dollar index is small. Weak US sales of retail and durable goods, as well as GDP figures in the first quarter, may play into the hands of the dollar.

The analyst believes that the targets “bulls”(securities traders who earn on the growth of assets in price) will be 1.057 and 1.062 euros for 1 dollar.

If the fall of the euro continues, then the dollar to euro exchange rate will be about 1.034-1.055 euros per one American monetary unit. As for the currency index, the dollar will not exceed the frame of 103.4-105 points.

Earlier, Topnews wrote that the expert called the real value of the dollar.


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