Forecast: Sharp fluctuations in foreign exchange market expected in March

Baku. 2 March. REPORT.AZ/ Sharp fluctuations in global currency markets forecasted against the background of important financial news in March.

Report informs, new variations of the currency market is forecasted taking into account the employment indicators in the non-agricultural sphere of the US, which will be released on March 5 next meeting of the European Central Bank (ECB), the next meeting of the Federal Reserve (Fed) on March 16 the expected decision of the Bank of Japan on March 15, the expectations of changes due to the end of the fiscal year in Japan and meetings between representatives of the oil-producing countries in order to control the oil market.

Noted that in February, the pound fell by 5.5% and the Japanese yen has strengthened by 8%, but more sharp jumps expected in the currency market in the coming months.

Economists forecast growth rate of employment to 195 thousand people on the basis of the report of 5 March.This is by 29% more than in January (151 thousand people).In this case, probability of increasing the key rate at the March meeting by FRS which leads to a strengthening of the dollar and a sharp depreciation of other assets.In order to convince investors to dollar strengthening, a high index of activity in services and indicators of wage growth required.Another reason for the strengthening of the dollar may be weakening of the euro due to lower ECB interest rates.

So, the last low inflation rates in the euro area compared to the projected forcing the ECB to increase the volume of monetary expansion.This will lead to a weakening of the euro.

The weak pace of Japan's economic growth contributed to the application of the negative interest rate by Central Bank of Japan. It is expected that Bank of Japan in the near term will carry out monetary expansion that would restrict decline of the yen.

Analytical Group of Report News Agency believes that in next 3 months USD/EUR rate will rise in favor of the dollar, and get closer to parity, JPY/USD rate will rise to 120.