The situation on foreign exchange markets remains extremely dull which have been repeatedly pointed out. The reasons for the unstable trends lies in the fact that markets are affected by a large number of differently directed factors that compensate each other's strength, which prevent investors to determine the direction of asset movement.

This trend began to form three months ago after clarifying that the Fed could strengthen the process of raising interest rates. But the growth of the dollar was restrained by the clumsy economic policy of US President Donald Trump, as well as his political instability in power, which led to "disorder and vacillation" in Washington. During the same period, the opinion of the markets was growing, stating that other major securities such as the Bank of England, the ECB and the Central Bank of Japan, will also proceed with the process of raising interest rates. While in the case of the British regulator, and in relation to the rest, there is a move towards normalizing the monetary policy breaking the incentive measures. Otherwise, it turned out that the dollar was restrained in growth while the euro, sterling, and yen turned out to be under recovery which allowed market participants to buy these currencies with hopes of further growth.

Since then, there's a lot of changes in the economic data from the eurozone, each published data began to point out that its economic growth is losing momentum against the backdrop of weakening inflation. This was the reason for the virtual stop in the growth of the euro/dollar pair. A similar picture was observed in the GBP/USD and USD/JPY pairs. Sterling remained and continues to be a hostage to Brexit, and the yen was called the currency of the asylum as it became a "victim" of one of its functions, after the signal from the Bank of Japan about the possible changes in the monetary course. The only one among major currencies that receives overall support was the Canadian dollar, which rose on the back of strong expectations that the CBA of Canada will continue to raise interest rates and strengthen amid the increasing geopolitical tensions in crude oil prices.

This was the difficult and "boring" picture formed in the currency markets. It can be expected that this situation will continue for some time. It is difficult to determine how long it will take because geopolitical winds are added to economic trends.

Today, the market will focus on the publication of consumer inflation data in the UK and the euro area. The continued growth in consumer price indices is unlikely to support both sterling and euro.

Forecast of the day:

The EUR/USD pair continued trading alongside the minor changes. Amid the release of consumer inflation data in the euro area today, it will remain in the range of 1.2315-1.2400.

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