FX.co ★ Spanish tension will not help the dollar

The tension around the referendum in Catalonia have faded a bit, and everyone is waiting for what will happen next. Throughout Catalonia, there were mass demonstrations and strikes but without violence, as it was on Sunday. The fact that the Spanish authorities do not use force has become an excellent reason for correction in the market, especially since macroeconomic statistics provided a good reason for this. Growth rates of producer prices in Europe accelerated from 2.0% to 2.5%, which significantly exceeded expectations. Once the prices of producers grow, then inflation should grow after them.

If today the situation in Catalonia continues to remain relatively calm, then the market will pay more attention to economic statistics. The fact that the situation will not be heated until at least the weekend follows from the words of the representatives of Catalonia, who said that independence will be proclaimed at the end of the week or the beginning of next week. It turns out that now there is a serious negotiation process, and it is too early to draw any conclusions.

In Europe today, the composite business activity index is expected to grow from 55.7 to 56.7. The growth rate of retail sales may remain unchanged, which is also not bad. However, US statistics can present an unpleasant surprise to the dollar, as employment should grow by 125 thousand, while a month earlier it increased by 237 thousand. It was almost a twofold decrease in the rate of employment growth which is not the best indicator on the eve of the publication of data of the Ministry of Labor.

The EUR/USD pair has all the chances to grow to 1.1795. Only increased tension in Spain can resume the weakening of the euro. The pair will then drop to 1.1715.

The GBP/USD pair, although falling, through the dollar index, will be more guided by US statistics today. The likelihood of its growth to 1.3305 is high.