The dollar is regaining strength. What will the week bring?
The most important market event of the past week was undoubtedly the monetary decision Federal Reserve. The Fed did not surprise and kept interest rates unchanged, which was initially interpreted by the market as a dovish move by policymakers. However, in subsequent sessions after the decision, the US dollar began to appreciate. Will this trend continue?
Reducing the pace of balance sheet reduction
A significant change resulting from the last meeting of the Fed is the lowering of forecasts for economic growth and the raising of the inflation projection in the United States. The Fed also decided to slow the pace of balance sheet reduction, which supported bullish sentiment on the stock market and led to an increase gold prices, which set new historic highs on the chart last week.
Raised inflation forecasts and the unemployment rate projection, along with expectations of slower economic growth, increase the risk of a stagflation scenario in the United States, but in the Fed's opinion, the forecast changes balance out and still justify potential rate cuts in the coming months of this year.
The change in the Fed's attitude is dictated not only by the recent decisions of the Donald Trump administration, but above all - by the change in macroeconomic data. US retail sales in February rose by just 0,2% - well below forecasts - indicating growing consumer caution. Both the current confidence indicator and expectations have fallen to levels comparable to the 2008 crisis and the slowdown in 2022. Can the current strength of the US dollar be maintained?
In today's webinar, the economist XTB Michał Stajniak will discuss the following topics:
- Will the Fed's decision support the dollar for longer?
- Will there be a lack of liquidity in the market?
- What do the latest macroeconomic data tell us?
In addition, due to the very dynamic situation in the world, additional ones will be made available raports Video with an analysis of the market situation precious metals.
About the host
Michał Stajniak - Raw Material Market Analyst in XTB. It places particular emphasis on the linkages between the behavior of commodity prices and the currencies of economies heavily dependent on exports of commodities such as oil, iron ore, gold and powdered milk. He is the author of frequent comments comparing commodity price indices with currency pairs such as AUDUSD, NZDUSD, USDCAD, USDNOK, or EURNOK. He represents XTB in the media (including TVN24 BIS, Polsat News, TVP Info, Bankier TV or Onet TV) and is the author of articles in the financial press such as Parkiet, Puls Biznesu and Dziennik Gazeta Prawna. He is a practitioner of the stock market and the derivative market. In his approach, he values fundamental analysis above all, but often uses Fibonacci levels to determine the demand and supply zones needed in a Price Action strategy. A graduate of Quantitative Methods in Economics and Information Systems at the Warsaw School of Economics.
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