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Forex · News · Forex ForecastsNEWS / Forex Forecasts |
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Break of Euro…Dynamics of rate and recommendations on EUR-USD and GBP-USD.
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07:46 03/19/2004
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Break of Euro…Dynamics of rate and recommendations on EUR-USD and GBP-USD.
Market has come out of equilibrium after the release of record low index of production activity in Philadelphia. Federal Reserve Bank in Philadelphia informed on Thursday that index of production activity in Philadelphia and its region has dropped to 24,2 in March compared to 31,4 in February. The given index is calculated on the basis of survey conducted among managers of regional production sector. All index values higher than zero indicate growth of production activity, values lower than zero indicate its reduction. In March, Philadelphia index was higher than zero for the ninth straight month, thus indicating continuing activity growth in the given sector. But the rates of growth are not that fast now. January index equaled 38,8, which was the highest value since January 1984, i.e. in the last 20 years. Economists expected that March index value would decrease compared to February one, however, their forecasts presupposed only slight decrease. According to Reuters survey, in average, economists forecasted that March index would reduce to 30,0.
Philadelphia index component, reflecting the volume of new orders, dropped from 27,8 in February to 21,9 in March. Component, reflecting the volume of supply, increased from 19,3 to 22,3. Component, reflecting the level of employment in production sector of Philadelphia and its region, reduced from 12,5 to 12,3. The value of the given component has been positive for the sixth straight month, thus indicating staff expansion in the given sector. Philadelphia index component, reflecting duration of working week in region’s production sector, dropped from 23,6 to 17,9. Component, reflecting prices received by production companies of Philadelphia for their product, increased from 18,9 to 22,6. Component, reflecting prices, paid by region’s production companies for raw materials, materials and complete parts, increased from 43,7 to 53,4. Component, reflecting the level of inventories, dropped from 0,8 to –12,8, thus indicating steep reduction of inventories. Component, reflecting the volume of orders that haven’t yet been fulfilled, increased from 4,4 to 8,8.
Market did not react in any way to increase in labor market indexes in the US. Unemployment claims are on the lowest level in the US. The given indexes are lagging ones and investors watch the given indicators and determine them as confirmation of production activity indexes, such as, for example, indexes of business activity.
Yesterday’s meeting of ECB supported the rate of Euro. Accounting data for 2003 was passed at the meeting but the rates were not discussed. Despite expectations, ECB representatives did not make announcements as to influence of Madrid explosions on Eurozone economy.
Recommendations: keep earlier opened buy position on Euro from 1,24, stop should better be placed at 1,2230.
Recommendations: keep earlier opened buy position on Euro from 1,24, stop should better be placed at 1,2230.
The forecast was created by trans1.
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