First week of spring

2019-03-02

From March 4 to 8, the movements of currency pairs will be determined by the following economic news:

  • Events in the “hot spots” – Venezuela, Pakistan and India. Here the conflict can even reach the use of nuclear weapons.
  • Also, everyone is waiting for information about the date of the meeting of the leaders of the United States and China.

These events can be attributed to unpredictable factors.

The most important milestones of the week will be:

  • Meeting of the European Central Bank;
  • Minimize the loan program of the Ministry of Finance and the US Federal Reserve.

Mario Draghi has to make a decision on extending the LTRO – a program to support banks with long-term loans with lower interest rates – after 2021. Despite the long-term implications of the outcome of the ECB meeting, traders will reduce the volume of euro purchases now.

This factor may not lead to the strengthening of the dollar due to the achievement of the sovereign debt ceiling by the US Treasury after March 1. The termination of loans from open markets will lead to an excess of dollar liquidity, weakening the US currency. Its growth at the end of the week can be provided by comparing the economic indicators of the leading economies of the world, if these indicators are in favor of the United States.

Oil traders should think about hedging purchased futures: in the first week of March, the US Department of Energy will offer 6 million barrels of “black gold” from strategic reserves to the markets.

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