The dollar exchange rate recently faced significant pressure, to the point where even extremely weak data couldn’t weaken it anymore. This situation is backdroped by a reduction in crude oil prices and the Hungarian forint.
Weaker data from overseas
Unexpectedly, the American economy is showing signs of slowing down. Yesterday’s order data significantly fell short of expectations. Orders excluding transportation equipment decreased by 0.3% on a monthly basis. Analysts forecasted a 0.2% increase. It’s important to remember that this is the first monthly decrease since last April. Orders for durable goods are also dropping. These data are more variable than the previous ones, so according to many observers, they do not have as significant an impact on the market. Interestingly, the dollar barely reacted despite this weaker data. On the other hand, the dollar was close to its weakest levels since the beginning of February. Many investors, therefore, were looking for an opportunity to buy dollars rather than selling them. It’s not surprising, then, that there were few takers for continuing the current trend and the dollar remained almost unchanged. This was the case despite even weaker consumer confidence index data later in the day.
A whirlwind in the oil market
The last few weeks on the so-called “black gold” market have been very active. There were no substantial changes, but the price jumped up and down constantly. A large part of this volatility stems from the conflict in the Middle East, as it sadly expands to include more groups. Traditional data still hit the market. Yesterday’s changes in US fuel reserves, which rose by 8.43 million barrels (more than 60% of US daily production in a week), are a good example. This big surplus led investors to sell off the commodity. As a result, since last night (given that the data was published at 10:40 PM in Polish time), oil has entered a downward trend.
The forint in retreat
During yesterday’s meeting, as most investors expected, the Hungarian central bank lowered interest rates. Analysts accurately predicted the cut to be 1%. The main rate is therefore 9%, making it the highest in the European Union. Romania is currently second with 7%, and Poland is not included in this rather unprestigious podium due to the Czech Republic’s result. Although most analysts accurately predicted the 1% cut, the market reactions clearly showed that some players, as in the past four meetings, expected a cut of 0.75%. The obvious sell-off of the Hungarian forint against the euro shows that investors had planned a better outcome for this currency.
In today’s macroeconomic calendar, pay attention to:
14:30 – US – GDP data revision.
Maciej Przygórzewski – Chief analyst at InternetowyKantor.pl and Walutomat.pl
