Today, investors are waiting amid the tense news from the Middle East, as the actual ultimatum of D. Trump expires in regard to Syria. Earlier, the US president promised to strike at Assad's "murderer" because he allegedly ordered to poison using toxic substances his own people.
Whether Trump will decide on these tough actions is difficult to say, but if nothing happens, this will noticeably reduce geopolitical tensions, which in turn will put pressure on oil quotes and support the US dollar rate.
On Wednesday, important data appeared on the US economy, which confirmed the presence of inflationary pressures. Together with the promulgated protocol of the Fed March meeting, the US regulator was convinced that could raise rates this year, not only three times promised by 0.25% but four.
According to the data provided, the CPI in annual terms in March grew by 2.4% with the forecast increase by the same 2.4% and the value for the previous year of 2.2%. In March, the indicator showed a decrease of 0.1%, although it was expected that growth will be absent. In February, the figure added 0.2%. Yet, the most interesting were the figures of the basic consumer price index (CPI), which came out as predicted. The base consumer price index (CPI) for the year added 2.1%, which came at the level of expectations and significantly higher than the previous value of 1.8%. Last month, the indicator grew by 0.2%, which coincided with the previous value and forecast.
Estimating the published figures, we can say that if the dynamics of consumer inflation continues, the Fed will have to be more active in pursuing the process of normalizing monetary and credit policy. Most likely, he will have to raise not only three times the cost of borrowing this year, but also add one more increase, by 0.25%. The fact is that the level of consumer prices, more precisely its base value, not only increased to a target level of 2.0% but it exceeded in March rising to 2.1%. This is a strong reason for a more active process of raising interest rates. In this case, the dollar will receive support despite the external negative background, which is formed on the basis of the Syrian crisis and the trade war with China.
Forecast of the day:
The USD/CAD pair is trying to recover against the background of waiting for news from the United States on Syria. If nothing significant is undertaken by the Americans, then the pair can breakthrough the 1.2615 mark then move to 1.2735. Supporting it will render reduction in the prices but not oil.
Quotations of "black gold" on the wave of the same events may fall to 64.75, from a technical point of view after breaking the level of 66.60.