The dollar yesterday became cheaper on all fronts, and it is rather strange. Of course, the number of initial applications for unemployment benefits increased from 236 thousand to 298 thousand. At the same time, the number of repeated applications decreased from 1945 thousand to 1940 thousand. The cost per unit of labor in the second quarter increased by 0.2%, and the labor productivity increased by 1.5%. Thus, despite the strong growth in the number of initial applications for benefits, the data is quite good. In Europe, the final GDP data for the second quarter showed an acceleration of economic growth from 2.0% to 2.3%. Also, the ECB raised its forecast for the rate of growth for the year from 1.9% to 2.2%. But the outcome of the ECB meeting, rather the subsequent speech by Mario Draghi, was to lead to the collapse of the single European currency. The ECB left the parameters of monetary policy unchanged, and the head of the ECB said that, if necessary, the quantitative easing program will be extended to December 2017. He also added that interest rates will remain low for a long time even after the completion of the quantitative easing program. But the euro did not fall in price. Many are inclined to the fact that the reason for the growth of the euro is that Mario Draghi did not express a relatively high rate of the single European currency. But this does not explain the weakening of the dollar, not only to the euro, but to the pound, and in relation to other currencies. The reason is clearly that investors are resigned to the fact that the Fed will not raise the refinancing rate not only in September but in October or December.
Today, there is no significant news, and those that are, rather bear a negative for the dollar, as wholesale stocks should grow by 0.4%. This is a leading indicator for the industry, and its growth is rather indicative of an early slowdown in the rate of growth in industrial production. Also in the UK, it is projected to accelerate the growth rate of industrial production from 0.3% to 0.4%.
The euro/dollar pair will rather consolidate around 1.2050.
The pair of pound / dollar is waiting about the same, only the benchmark is 1.3100.