World markets closed lower last week as expectations for further rate hikes surged. The Swiss National Bank, Bank of England and the Federal Reserve continued to increase the discount rates, while the Bank of Japan left its monetary policy unchanged. The latter also carried out intervention aimed at supporting the national currency. This scenario is unusual, but at the same time explainable because earlier, dollar was declining amid low interest rates, which allowed the US to pay off debts and promote goods in foreign markets. After the start of geopolitical tensions in the world, capital from the EU and UK began to move to the United States since dollar is a safe-haven asset.
The coming week will be rich in various events, such as speeches of ECB and Fed representatives. There will also be economic statistics, of which the most significant will be GDP figures, US personal consumption price index and EU consumer inflation. Most likely, dollar will remain in demand, receiving support against major currencies. This means that there could be local correction upwards.
Forecasts for today:
EUR/USD
The pair may partially recover, rising to 0.9685. But then it will resume its decline and fall to 0.9555.
GBP/USD
The pair may rise to 1.0700, then turn around and resume the decline to 1.0335.