The safe haven currency is still becoming a favorite for the market sentiment at the beginning of this week. The Japanese Yen and US dollar maintain their strength to the high-risk currencies.
Mesnwhile, the USD/JPY is consolidated around 110.10 -110.60. EUR/USD and GBP/USD is stronger. However, they are still located near the multi month lowest range in the market.
The market participants are quite careful amidst the new COVID-19 cases which are increasing and ahead of the FOMC meeting. For your information, that meeting will be held this week.
The Commonwealth Bank of Australia or CBA is projecting that the US dollar can be stronger this week. It is because there is a possibility that the Fed will walk closer to tapering decision.
The Meeting Result will be Highlighted
Because of that situation, market will highlight the result of two last meetings held by the Fed on Wednesday. The CBA strategy expert, Joseph Capurso, wrote in his note quoted by Reuters.
He predicted that FOMC will set aside the substantial word from the continuing substantial progress. That is listed in a guide about the important requirements that must be filled by Tye employment market.
It is especially before The Fed take back their monetary support. He assessed that the substantial word which is erased is a sign of the FOMC availability to start the tapering.
That is for the asset purchasing program in a closer time. Not all analysts have the hawkish sight like that. On the previous meeting, it was true that the Fed deleted their statement.
The Federal Reserve may Take the Neutral Attitude
That statement is about the opinion that coronavirus is a weight for the economy. However, the COVID-19 cases in the America has been increasing significantly until now.
That has been counted since that meeting was ended. Generally, the Fed is predicted to take the neutral decision before the Jackson Hole symposium at the end of August this year.
Meanwhile, the risk is more on the dovish side because of the delta variant spread. The delta variant spread is continued to happen globally, including in the United States of America.
The top pandemic handler representative in that country, Anthony Fauci, claimed that the public there may need the booster vaccine or the third injection. That is a solution.
China Announced the New Cases
Elsewhere, China announced the highest new COVID-19 cases increase since the last January. Japan, which is hosting the Olympic game, also report the new cases happened every day.
Meanwhile, the representatives in Australia worry about the new coronavirus cases there. It is especially in the Victoria state and New South Wales after the anti-lockdown demonstration.
In the other side, the Germany IFO business trust felt down to 100.8 in June 2021 after reached their peak in 2.5 years at 103.7. That result is also lower than the increase expectation.
The cause is the bottleneck which is happened in the supply side in line with the increasing coronavirus infections in Germany. The president said that the economic mood there is declining.
The Supply Problems Weight on Some Sectors
The supply problems there has been weighting on the retail and manufacture sectors. For about 64% of the industry said that they are lacking of materials. The cause isn’t only the pandemic.
That also because of the nature disasters which were happened in Germany. That makes the supply is more difficult to be delivered. It creates several problems ahead for the industry.
The examples are like the raw materials flow and the consumption goods. Although the Germany data is disappointing, EURO is still more powerful against the US dollar.
When this news was written, the EUR/USD increased by 0.39% to the level of 1.1814. That bounced back from the low level noted yesterday. The USD is now weakening to most currencies.
