Currency report: Slow start and the status quo

The worldwide markets were waiting anxiously for macroeconomic data and any kind of decision on monetary policy from the key world economics. Tuesday was data disclosure day of notes from the FED session. There will not be a federal funds rate rise soon. Considering the economic situation, this  means a stable period of dollar rates is in store. Second quarter GDP dynamics estimates were also revised to 2.9 percent, in line with market expectations.

GUS released data showing a GDP growth rate of 5.5  percent. This is the best rate since EU accession. What's important is that it is mostly based on companies' investments rather than individual demand. Thursday's Monetary Policy Council session left interest rates untouched at the level of four percent, suggesting a more careful watch on inflation threats in the coming months. The ECB published a similar communiqué, which could be a veiled suggestion of a euro rate rise at the end of the year. Investors are fearful of an eventual tightening in monetary policy, which could led to a weakening of the EUR/USD cross.

Magda Grzybowska,

Stock and Money Broker X-Trade Brokers