Dollar shows more confident strengthening, rather than the day before, most notably manifested against the yen. The Japanese currency bears impressive losses in terms of growth of risky assets after reaching agreement on the limitation of OPEC oil production. USDJPY intraday gain is about 100 points, supporting the dollar in other currency pairs.
A good catalyst for buying USD and served as the second estimate of US GDP for the second quarter. The economy grew by 1.4% compared to the prior level of + 1.1% and the forecast of + 1.3%. In the first quarter, GDP increased by only 0.8%. Signs of improvement of health of the economy, coupled with the recent hint Yellen at risk of overheating GDP at current employment growth rates can create conditions for strengthening of the dollar in the longer term.
It also talks about improving the prospects of Fed rate increase later this year. However, it is too early to judge. First, presidential elections, which are a risk factor for financial markets in November. And secondly, we will see a lot of important economic releases that will generate a clearer picture closer to the December meeting of the Central Bank.
In general, the dollar will not have sufficient grounds for a more distinct growth as long as the monetary authorities do not show a greater tendency to tighten. The more “predatory” comments will be heard from the mouths of representatives of the Federal Reserve, the stronger will look like the dollar. In the short term EURUSD continues to defend the level of 1.12, the loss of which can increase the pressure on the euro.