Starting from this year, the rates turned up and we can see that this is not a price correction. Instead, it's part of a new uptrend. So why is the USD becoming stronger?
It is largely due to impressive macroeconomic reports, which one after another show an improvement in the economic situation. This has not gone unnoticed among investors. The probability of changing the rate earlier than planned has started to grow. Among the reports published this week, the manufacturing PMI index stands out, which in February rose to 60.8 pips. At the same time, business activity in China is below the forecasts, which motivates investors to buy the USD, which is currently considered very promising.
Safe assets are not getting enough attention among investors, although the pandemic is far from over and all the risks associated with it are still present. Switzerland continues to experience deflation, which puts pressure on the CHF. Business activity is growing faster than expected, but it's not enough to counter the stronger dollar these days.
We expect further USD growth this week. On Friday, data on the labor market is expected and according to the forecasts, the situation will change dramatically for the better. In particular, the markets expect an increase in the number of people employed in the non - agricultural sector from 49,000 to 180,000. At the same time, the deficit in the trade balance in January is able to grow. Most technical analysis tools also indicate the efficiency of the deals to BUY.
