In the coming week, the rate of the major currencies will be determined by the Fed’s decisions. The topic of accelerating inflation becomes relevant on the eve of the infusion of $ 1.9 trillion into the US economy “Biden’s help”, traders are waiting for the FRB bankers to explain how the rate will rise in this case.
The dollar will rise if the Fed confirms its intention to raise the rate upon reaching the inflation threshold of 2%, and will fall if there is a desire to continue easing monetary policy above this value. The American currency will also be supported by the implementation of the vaccination plan for the population by April, proved by stable production volumes of US-approved vaccines.
It should be noted that it is difficult to make unambiguous forecasts this week due to the release of a large number of economic indicators for European countries. Business activity indices, employment rates, ZEW indicators and ECB minutes will have a contradictory impact on the rates of European currencies.
The arrival of Mario Draghi as prime minister, negotiations between the EU authorities and the United States on lifting Trump’s sanctions and duties on Eurozone goods can also play a significant role and raise the euro exchange rate.