21.02.201809:19 Forex Analysis & Reviews: The text of the Fed's protocol can further strengthen the dollar

The market is looking forward to the publication of the text during the minutes of the meeting of the Federal Commission for Open Market Operations, as they hope to see an answer to the question regarding the pace of the rate increase.

Against the backdrop of lacking news on the previous days, the dollar has some strengthened in anticipation of today's news. First preliminary data on business activity indices in Europe came out, which can further ruin the life of the single European currency. The index in the service sector should decrease from 58.0 to 57.6, and the production index from 59.6 to 59.3, and as a result, the composite index will decrease from 58.8 to 58.5. But the pound has a chance to improve its position to some extent. Not only that, the number of applications for unemployment benefit in the previous month of 8,600 last month may increase by 4,100 amid the stability of the unemployment rate and the rate of wage growth. Also, borrowing of the public sector should be reduced by 11.1 billion pounds.

However, the dollar's growth will increase in the second half of the day. Preliminary data on indices of business activity can show growth. In particular, the index in the service sector should grow from 53.3 to 54.0, although the production index may fall from 55.5 to 55.4. But the service sector has a heavier impact, the composite index is expected to grow from 53.8 to 54.4. Moreover, home sales in the secondary market may show an increase of 0.9%. Well, the most important event not only for the day but also for the whole week s the publication of the text of the minutes of the recent meeting of the Federal Commission for Open Market Operations. The regulator planned, as many as, three increases for the current year. If the Fed confirms its plans last year, then the dollar will have many reasons for growth.

The EUR/USD pair will decline to the level of 1.2250. If the contents of the text of the protocol disappoint investors, we should expect growth to 1.2425.It should contain answers to the question about the rate of increase in the refinancing rate in the current year. At the moment, almost everyone agrees that the Fed will raise the rate at least once. But do not forget, this was similar even last year.

If the text of the minutes of the meeting of the Federal Commission for Operations in the open market will please investors, the GBP/USD pair will drop to the level of 1.3850. Otherwise, we expect growth to 1.4100.