Good and bad news for the dollar | 16 12月 2020

16 12月 2020, USD/JPY

Good and bad news for the dollar

USDJPY trading plan:

U.S. manufacturing output rose 0.8% last month after surging 1.1% in October, the Federal Reserve said. Factory production remains 3.8% below its pre-pandemic level. Motor vehicle production rebounded 5.3% after declining for three straight months. Excluding motor vehicles, manufacturing output increased 0.4% after surging 1.3% in October. Production at mines rebounded 2.3% after declining 0.7% in October. Oil and gas well drilling increased 8.3%, rising for a third straight month. Capacity utilization for the manufacturing sector, a measure of how fully firms are using their resources, rose 0.6 percentage point to 72.6% in November. This is a positive signal for the dollar. The Fed is expected to keep interest rates pinned near zero and to signal where rates are headed in the coming years when it concludes its two-day policy meeting later in the day. We are expecting new guidance on a timeline for the Fed’s massive bond-buying program. This is a negative signal for the dollar.

Investment idea: range 103.10 -103.95.

David Johnson
Analyst of «FreshForex» company
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