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Forex · News · Forex ForecastsNEWS / Forex Forecasts |
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The yen has once again surprised everyone…Rate dynamics and recommendations on EUR-USD and GBP-USD.
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06:50 03/31/2004
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The yen has once again surprised everyone…Rate dynamics and recommendations on EUR-USD and GBP-USD.
Yesterday’s events have once again changed players’ sentiments.
On Monday, European Commission – the executive and regulating body of the European Union – released regular quarterly report in which noted that Eurozone economic growth had to increase in the second half of the year, despite high rate of the Euro and weak consumer spending. “Weakness of consumer spending” was regarded as the most dangerous threat to economic rise. Last week, Jean-Claude Trichet, ECB chairman, also mentioned weakness of Eurozone consumer spending, thus having created grounds for speculations about near reduction of the rate of refinancing. European Commission did not express great concerns in terms of consumer spending, having pointed to the fact that despite mixed economic signals, Eurozone economy was heading to “mild revival” in the current year. According to European Commission, growing world demand compensates negative effect that high rate of the Euro produces on Eurozone exports. European Commission experts noted that the rate of the Euro “only slightly exceeds its long-term value”. As for the interest rates in Eurozone, real short-term and long-term rates are on the minimal historical levels now. According to the report content, European Commission did not appealed to ECB to reduce the rate of refinancing, as done by Hans-Werner Sinn, the president of German Research Institute Ifo, on Friday. That made players doubt that ECB would reduce the rate of refinancing.
Conference Board analytical organization informed on Tuesday that consumer confidence index, calculated by Conference Board, dropped to 88,3 in March compared to revised February indicator that made up 88,5. According to initial data, February index equaled 87,3. According to Reuters survey, economists forecasted the given index to drop to 86,5.
Index component, reflecting Americans attitude to economic situation and their current financial standing, rose from 83,3 in February to 84,1 in March. Index component, reflecting Americans’ expectations in terms of the nearest six months, dropped from 91,9 in February to 91,0 in March. Compared to revised February value that equaled 28,9%, 30% of Conference Board March respondents think that it is difficult to find a job. According to initial data, February value equaled 32,1%.
Nothing significant has happened in terms of EUR and GBP. Price on EUR approached global trend line and upward movement can be regarded as correction so far.
There occurred a sensation on USD/JPY rate. The yen has broken out the historical level of support at 105. BOJ currency intervention was expected to take its start from the given level. But when the Bank of Japan stated that it would stay composed, dollar market crushed under the weight of significant arguments of positive economic indicators in Japan.
Recommendations: stay out of the market.
Recommendations: stay out of the market.
The forecast was created by trans1.
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