Yesterday’s session brought strengthening of US dollar, which was the aftermath of better data from the local economy, as well as the effect of the positive tone of speech of president of the Fed, Janet Yellen. Their two cents has made the administration of new US President Donald Trump, whose representative suggested the possibility of renegotiating the North American Free Trade Agreement (NAFTA).
Yesterday’s speech of the chairman of the US Federal Reserve undoubtedly supported the US currency. Janet Yellen during a meeting at the Commonwealth Club in San Francisco took quite hawkish rhetoric, especially if you compare it with the comments from few months ago. Yellen in the speech indicated that she, as well as most members of the Fed expects several interest rate hikes this year – we got so clear confirmation that the view of Reserve Chairman comply with indication of Dot-Chartu, which even suggests three increases to the end of December. Of course, right after we heard the standard comment that the pace of the normalization of monetary policy will depend on upcoming data from the US economy, but the state of the output at the moment is positive for the USD – Fed wants to raise rates several times. This type of scenario is also supported by data from the US economy. Industrial production turned out to be better than expected and core inflation measured by the basket for a long time is above the Federal Reserve aim.
Much more excitement provided, however, comments from Wilbur Ross, candidate for Secretary of Commerce. During the hearing in the Senate before the approval of his candidacy, he stated that one of the first tasks of the new administration will re-negotiation of NAFTA. He added that each paragraph of this Agreement may be changed, which negatively affected the currencies such as CAD and MXN. The Canadian dollar also lost after the meeting of the Bank of Canada, which suggested the possibility of further interest rate cuts.
Today we will know the decision of the European Central Bank, which should keep policy unchanged. For this reason, the key will be the conference of Mario Draghi. Its positive development can lead to the strengthening of the euro and the currencies of the European unit such as, among others, Polish zloty. At 9:45 for dollar was paid 4.0967 PLN, 4.3597 PLN per euro , and the Swiss franc 4.0682 PLN.
