02.07.201910:35 Forex-elemzések és áttekintések: The dollar is still growing at a slower pace due to weak growth of the American economy than in other regions of the world (Selling on the growth of EUR/USD and NZD/USD pairs)

The central banks of economically developed countries seem to be confident that the Fed will start lowering interest rates this year, which was clearly manifested in the decision of the Reserve Bank of Australia. They decided to lower the key interest rate by 0.25%, from 1.25% to 1.00% at today's meeting.

As it seems to us, this is a strong signal for investors, indicating that the American regulator might be sure to lower interest rates in July following the June meeting. The question of how much remains. It will either by 0.25% or, as it was expected more recently by the markets by 0.50%. the moment, according to the dynamics of futures on federal funds rates, markets expect lower interest rates by 0.25% with a 78.6% probability as a result of the recent Fed meeting. This is a fairly high value.

Note that the Central Bank of economically developed countries responded earlier at the beginning of this year to the change in Fed sentiment about continuing the interest rate increase cycle only by stopping changes in their monetary policies. In other words, they simply left their interest rates unchanged, carefully watching the Fed's actions.

On Monday, the dollar received significant support against major currencies despite expectations of lower rates in America. On the one hand, it is strange in the context of the forecast of lowering central bank rates and on the other, it is justified. The decision of the RBA to lower the rates just explains it. It seems that while the Fed will balance its decision to lower rates or not, and considering the negotiation process between Washington and Beijing on trade

the growth dynamics of the global economy and the output of economic statistics, the ECB and other regulators of economically developed countries will begin to soften their monetary policies. For example, the head of the Finnish Central Bank Olli Rehn, who is a potential successor to Mario Draghi as president of the ECB, said that "the Board of Governors is ready (based on the conditions) to adjust all of its instruments.

The ECB is being pushed towards such radical actions by negative dynamics in the economy of Germany and a number of other eurozone countries, as well as clear signs of recession in the region as a whole, which was clearly shown by the data of business activity indices in the manufacturing sector of Germany, Italy, France and the eurozone in general. Indicators have been long below the threshold of 50 points.

At the same time, this indicator for the USA showed a decline to 51.7 points in June against 52.1 points in May, but it is still above the level of 50 points.

In general, we note that the local growth of the dollar so far can be explained by the slower growth of the American economy compared to Europe as an example. However, the situation may change dramatically if in the near future weaker economic statistics will come in, which may force the Fed to act more resolutely. However, the situation may change dramatically if in the near future weaker economic statistics will come in, which may force the Fed to act more resolutely.

Forecast of the day:

The EUR/USD pair found support at 1.1380 after falling the day before. It may correct upwards to 1.1315 on the wave of local oversold. We consider it possible to sell it from this mark with the target of 1.1245.

The NZD/USD pair is trading above the level of 0.6660. The pair may be under pressure and continue to decline to 0.6630. Then, it will likely go to 0.6600 on rising expectations of lowering RBNZ interest rates after what the RBA did today.