European currency has positive dynamics
Consumer prices in Germany and Eurozone declined in January that did not prevent demonstrating positive dynamics by the single European currency last week. Its recovery was associated with profit-taking on the background of technical oversold, as well as purchases of the euro against the Swiss franc. There was not any negative reaction after the release of data on consumer price inflation, as the European Central Bank has launched a program of quantitative easing aimed at combating deflation. However, the downward trend in EURUSD remains in force and the traders will use it to sell the pair.
Positive numbers in UK economy
The growth of the UK economy in the 4th quarter of last year amounted to 0.5% q/q and 2.7% in a year. These data have not held up to the predicted values adding negative to the British pound, which is paired with the US dollar fell to 1.4990. It’s oversold facilitated the return above the breached support at around 1.5040, but it is not necessary to say about the formation of the base in the pair. After dropping an interest rate by Bank of Canada, the Canadian dollar has been completely dominated by bears. US dollar in tandem with it renewed a maximum and tested the resistance at 1.2795. Looney looks oversold but oil quotations show a positive trend, which increases the risks of CAD correction, although signs of the downtrend completion are still there.
Interest rate remains the same in Reserve Bank of New Zealand
The Reserve Bank of New Zealand did not lower the interest rate, but in its comments admitted the possibility of a rate reduction at the next meeting. Market participants reacted to the new wave of sales of the New Zealand dollar, which in tandem with the US dollar has updated a minimum, falling to 0.7215. New Zealand central bank’s comments and actions of the Canadian regulator raised expectations of similar action by the Reserve Bank of Australia at the upcoming meeting this week. In addition, the consumer price index in Australia came below analysts’ forecasts, reinforcing expectations of easing monetary policy by the Australian central bank. US Federal Reserve decision to leave interest rates unchanged was widely anticipated. In the comments, it was noted that the Fed will not rush to increase rates, but gave a positive assessment of the US economy, which ultimately supported the US dollar.