FRS left the rate without a change and the rate of dollar is still stable…Short review of the market. by OpenForex.com

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FRS left the rate without a change and the rate of dollar is still stable…Short review of the market.

13:19 03/18/2004

Short review of the market. Market activity has been rather low recently, which contributes to steep movements of the rate. In the first two day of the new week, American currency got weaker as a result terrorist acts fears. However, dollar began its growth against European currencies at yesterday’s American session. Dollar rate is supported by growth of American stock exchange indexes. On Tuesday, the US Ministry of trade informed that number of houses that were being constructed in February dropped on 4% compared to previous month and made up 1,855 million units in annual estimation. January indicator, revised aside increase, made up 1,932 million units in annual estimation. Despite reduction, February indicator exceeds aggregate indicator of last year, which made up 1,848 million houses and was the highest since 1978. That, in fact, contributes to economic growth acceleration. Economists expected that number of started houses would increase to 1,930 million units in annual estimation in February. Initial January indicator made up 1,903 million units. Number of started one-family houses decreased on 4,1% to 1,489 million units, which is the lowest level since May 2003. Apartment houses that were in the process of construction decreased on 3,4% to 366000 units in annual estimation. Number of construction permits, which are the indicators of future construction activity, reduced on 1,5% in February and made up 1,903 million units in annual estimation. January indicator made up 1,932 million units. Federal Open Market Committee of FRS US left major interest rates on the same level. The regular meeting of FOMC took place on March 16. The rate stays level of 1.00%. Prior to that, the given rate was reduced at the regular meeting of FOMC, which took place on June 24-25 2003. Committee states that the number of dismissals is decreasing, however, the rates of new working places’ growth are not yet high enough. The risk of inflationary growth almost equals the risk of inflationary slow-down. The same can be said in terms of economic growth. Analysts note that FRS US comments that follow its decision testify that FRS US is not planning to increase major interest rates in the nearest future. Instinet Research Analytical Group announced that Redbook Retail Sales arose on 5,4% during the week that ended on March 13 compared corresponding week of last year. Last week’s growth made up 5,1% compared to last year’s indicator. During the first two trading weeks of March, Redbook Retail Sales Average reduced on 0,5% compared to first two trading weeks of February. In the first trading week of March, increased decreased on 0,7% compared to the first week of February. According to calculations made by ICSC/UBS analysts, sales in large American retail trade systems, including discount chains and department stores, increased on 0,5% during the week that ended on March 13. Sales reduced compared to previous week, when they decreased on 0,3%. Compared to the similar week of last year, ICSC/UBS index increased on 7,0% last week. During the previous week, index increased on 7,1% compared to last year’s indicator. According to new forecast of ICSC/UBS analysts, growth of comparable sales, i.e. sales in stores that were opened not less than a year ago, will make up about 6,5% in March compared to the similar month of last year. A week earlier, the forecast presupposed that the given growth would make up 6%. In February, when retails sales were very successful, compared sales growth made up 6,7%. In Britain, consumer prices increased on 0,3% in February compared to previous month, when they dropped on 0,5%. The given data was rendered by National statistical services. Harmonized CPI, calculated according to common European technique, increased on 1,3% in February compared to last year’s level. January increase made up 1.4%. Annual rates of CPI growth reduced to 2.5% in February from 2.6% in January. Annual rates of price growth, excluding interest payments on mortgage credits, reduced to 2.3% in February compared to 2.4% in January. Index, calculated by ZEW European Economic Research Center, situated in Mannheim, reduced from 69,9 in February to 57,6. The given index estimates prospective of upcoming economic growth. December index made up 73,4, which was the maximal value in 42 months. Economists expected index to reduce to 65,8. ZEW report notes that index, which was calculated on the basis of survey that was conducted prior to Madrid events, made up 59,1. The same index made up 55,9 after the terrorist acts. Reduction of entrepreneur confidence index, industrial production and the volume of industrial orders in Germany, arises reasonable doubts as to steadiness of regional economy stabilization rates. Last year’s growth was the slowest in 10 years.

The forecast was created by trans1.