After the USA dollar rate renewed maximum of March during trading in the European session, it reached 80.49, on the U.S. session, the dollar index began trading with downward after the speech of the U.S. Federal Reserve Janet Yellen.
During the press conference, the head of the FRS U.S. dollar fell to around 80.06, near which is trading at the moment.
Finance staff of binary options broker Optionova talked about reasons for the decline of the dollar against major world currencies in the financial markets.
The dollar needs extraordinary help
Today, at 17 hours 55 minutes Moscow time in Chicago chairman of the Federal Reserve System (FRS) the USA Janet Yellen said that currently the economic recovery is still feeling the effects of the recession, which is why the Central bank of America will provide “emergency" support for the economy in the near future.
In her speech at the conference in Chicago Community Reinvestment D. Yellen also presented evidence why there is still weakness in the labor market.
D. Yellen expanded reasons, she believes that there are much more people willing and able to work than the jobs for these people, that is, the FRS chief said bluntly that the U.S. does not have the proper amount of jobs.
"Of the many reasons contributing to the weakness in the labor market, I note that it is today. I think that this extraordinary commitment is still needed and will continue to exist for some time, and I believe that this aspect of the general policy on keeping the FRS shared with me my colleagues, "- said D. Yellen.
Yellen also provided three examples from real life of people affected by the crisis in employment, and stressed that “even though we are working through the financial markets, but our goal is to help the working class, not Wall Street." She noted that 7 million people working part-time but want it to be complete. This number is much higher than would be expected at 6.7% unemployment rate , based on past experience, and the presence of such a large number of "underemployed" people is a sign that the working conditions worse than indicated in the figures on unemployment. In addition, the number of people who voluntarily quit their jobs, significantly below targeted levels before the recession. D. Yellen also said that the decline in the unemployment rate did not help to raise wages to workers.
"The low level of wage growth is, in my opinion, another sign that the FRS's job has not done yet," - said Janet Yellen. Problem on unemployment and combat became the principal at a press conference today in Chicago. As for the narrowing of bond purchases, on this occasion the FRS chief said : " In this context, the recent steps the FRS to reduce the rate of new purchases of securities are not weakening of this commitment .
There are some opinions that the recent progress in the labor market means that our help to restore economic growth should not be so quick. "FRS gradually reduces plans to buy bonds from the mark of $ 85 billion dollars per month to $ 55 billion per month. She told that the combined and dramatic impact on interest rates will be as many as you will need to buy bonds to lower long-term rates. "There is a likelihood that these actions without the recession and slow economic recovery would occur much worse” - said D. Yellen.
Reaction to the speech dollar D. Yellen
Experts of Optionova (included in the binary options brokers rating of Masterforex-V Academy) held a technical analysis time slot schedule of exchange of the dollar index. All important aspects of technical exchange for the dollar index in the U.S. session remained within the broad Fleta: 79.85-80.42. When you return to the flat rates in examinations at the beginning of the European session, the dollar index continued to decline amid speech by FRS. However, since the emergence of the situation in the European session, the dollar index to almost nothing has changed. While the situation on the trading instrument remains unclear.
For the dollar index is also important and immediate support / resistance remained lower and upper limits of a wide Fleta, i.e. line pivot MF 79.87 and 80.39. Long-term bearish trend for the dollar index remains valid until that, as noted by this moment by experts of Optionova. Resistance is the upper bound considered Fleta 80.42 and pivot MF; line 80.45 (50) (MF pivot and range Fibonacci grids (38.2 % and 61.8 %)). Supports: the flat bottom line wide and 79.85 pivot MF; 79.85 local minimum.
