15.12.201708:29 Forex Analysis & Reviews: "Big Thursday" was predictable

On "Big Thursday", the three largest world central banks held meetings on monetary policy, which were not surprises but confirming the preservation of their monetary rates at least until the beginning of the new year.

The Swiss Central Bank left the key interest rate at the level of -0.75%, while the bank's chairman, Thomas Jordan frankly stated that "it is still too early to talk about the normalization of monetary policy in Switzerland." After these words, the franc fell against the US dollar.

The European Central Bank also remained true to its plans, and clearly states that that interest rates in the region would "stay at current levels for a long period of time, even after the purchases by the asset regulator" during the end meeting of the bank in October. At the same time, based on further explanations, the program of incentive measures will take effect until September of next year and the process of reinvesting from sales of government bonds may continue for a considerable period of time.

Later, after the publication of the ECB meeting, the speech of the bank's President Mario Draghi also was nothing special. He mentioned the traditional positive words about the successes in the eurozone economy, and talked vaguely about the prospects for monetary policy, as usual. This was the reason for the depreciation of the euro, which only increased against the background of data publication on retail sales in the United State, which came in significantly higher than forecasts.

According to the data, the base retail sales index in November jumped by 1.0% against the upward revision of 0.4% in October. The volume of retail sales in monthly terms also added 0.8% against 0.4% in October, which was also revised upward.

The result of the BoE's meeting were proven to be predictable. The British regulator retained the interest rates at the previous level. The key interest rate was maintained at 0.50%. The volume of the quantitative easing program in the amount of 435 billion pounds sterling. In its announcement, the bank made it clear that it could return to the issue of further raising interest rates in the next three years. This was a clear signal, indicating that growth rates in the foreseeable future are not expected. On this wave, sterling was under pressure but not so noticeable. The situation around the UK exit from the EU continues to negatively affect it.

Forecast of the day:

The EUR/USD pair may remain today in the range of 1.1765-1.1840, but if it overcomes the 1.1765 mark, there is a possibility of continuing the decline to 1.1715.

The GBP/USD pair remains rather unpredictable, as it is completely dominated by the outcome of the Brexit talks. The positive news may lead to an increase to 1.3550 after a break of 1.3465 or a drop to 1.3300 after overcoming the 1.3390 mark.

* The presented market analysis is informative and does not constitute a guide to the transaction