The U.S. dollar fell against most of the major currencies after unexpected firing of Rex Tillerson as the U.S. State Secretary and the EUR/USD pair climbed above the 1.24 level. Things turned around after today’s speech of EBC’s Mario Draghi. Support is set at 1.23, resistance at 1.24.
Donald Trump has unexpectedly fired Rex Tillerson, the U.S. State Secretary after a series of rifts over policy on North Korea, Russia and Iran. Tillerson will be replaced by loyalist Mike Pompeo. This reminds the events from the previous week, when Gary Cohn’s resignation undermined the U.S. currency. The dollar has also dropped after the release of inflation data, which came along with the expectations. This suggests that the Federal Reserve will rather stick to its plan to raise the rates gradually. Fears of a global trade war got renewed once again. According to Reuters agency, Donald Trump is planning to impose tariffs on Chinese goods. Tariffs would mostly target technology and telecommunications sector,
The euro initially gained amid the news and the EUR/USD pair reached 1.2407 level, its highest in six days. Things turned around after the speech of Mario Draghi this morning. European Central Bank’s head said that the monetary policy will remain patient despite it being more confident on the future path of inflation. Draghi reiterated that the currently low rates won’t be changed for a long time.
Pic.1. EUR/USD chart.
Events in the U.S. pushed the pair above the current resistance level, but the rally stalled after the speech of Mario Draghi who toned down the moods of the euro bulls. Advance retail sales reading in the U.S. will be the most important release of the day. Any kind of disappointment may put the dollar under pressure once again.