Waiting is one characteristic that can describe what is happening in the market. The single European currency generally stands still on a tight spot, even the pound responded to the data on the labor market only by a small and short-term increase. Nonetheless, it turned out to be much better than predicted. Not only did the growth rate of average wages with premiums remained unchanged and did not decline as expected, the unemployment rate also fell from 4.0% to 3.9%. Indeed, the growth rate of average wages without taking into account bonuses slowed down but only due to a larger revision of the previous data. It is also worth noting that the American statistics turned out to be slightly worse than forecasts since production orders grew only by 0.1% and not by 0.3% as predicted, however, all these did not make a proper impression. Moreover, market volatility was extremely low. The market is waiting for the outcome of today's meeting of the Federal Commission on open market operations.
The fact that immediately after the meeting, a press conference of Jerome Powell will take place adds piquancy to the situation. Practically no one doubts that the head of the Federal Reserve System will declare in almost direct words that the refinancing rate will not be raised this year. But everyone knows this anyway. The regulator has already hinted at this development. The whole point is that there are good reasons to believe that some measures to mitigate monetary policy will be announced today. This is what everyone is waiting for after the European Central Bank has actually resumed its quantitative easing program. Moreover, the Federal Reserve System hinted at the possibility of easing its monetary policy at the very beginning of the year and as soon as this is confirmed, the single European currency will rush to 1.1400.
But before Jerome Powell shares his life plans with us, we are waiting for data on inflation in the UK. Of course, this is not as interesting as another attempt to push through the House of Commons bonded divorce agreement but after all the vote was canceled. Hence, we have to be content with what it is and there is nothing to look at because inflation should remain unchanged. Nevertheless, the pound will also revive only after the announcement of the results of the meeting of the Federal Commission on open market operations and it will most likely move towards 1.3325.
The material has been provided by InstaForex Company - www.instaforex.com