Brief review of the market. by OpenForex.com

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Brief review of the market.

12:55 06/09/2004

Brief review of the market. American currency had received support against major currencies after the statement made by FRS U.S. chairman Alan Greenspan, who said that Central Bank of the United States would do its best to keep inflation under control. Alan Greenspan said that rate hike was likely to be moderate but Central Bank of the U.S. was ready to do everything required to resist inflation. According to his words, this decision is based on the analysis of the way economic and financial forces will interact in the nearest months and quarters. In case that decision is not correct, FRS will gladly fulfil its requirements and will approach price stability in order to verify maximal possible economic growth. Alan Greenspan thinks that financial markets are ready for rate hike, not as it were in 1994. He thinks that price-forming forces returned to business and deflation threat no longer existed. However, price pressure is relatively small. Energy cost rise causes some concerns, as it might result in inflation, in case it stays the same. At today’s trading, when the last data showed strong growth of Japan’s economy in the first quarter, the yen rose to its weekly maximum against American currency. According to data, published by Japan’s Cabinet of Ministers’ Secretariat, compared to the previous quarter, national economy grew 1,5% wider starting with January to March. That is higher than the earlier estimate that equaled 1,4%. In annual estimation, the tempo of growth was revised to 6,1% against 5,6%. GDP deflator was left on the level of 2,6% y/y in the first quarter. Cabinet of Ministers’ Secretariat economists said positive revision of data was mainly due to the level of private sector inventories. In the first quarter, inventories added 0,5% up to the total GDP compared to the initial estimate that equaled 0,2%. Domestic private sector’s contribution was also positively revised to 1,3% against the initial 1,2%. In Germany, the number of employed dropped on 151 000 people to 37.8 million people in March compared to the previous year’s level. In February, the given indicator dropped on 131 000 people. Compared to the previous month, the number of employed increased on 135 000 people in March. Seasonally adjusted number of employed dropped on 33 000 people in March compared to the previous month, when the number of employed dropped on 22 000 people in February and on 18 000 people in January. In Germany, consumer prices rose 2,0% in May against the last year’s level. Consumer prices rose 1,6% in April, says Federal Statistical Services. Compared to the previous month, consumer prices rose 0,2%. Prices for food stuffs rose 0,3% in May compared to the previous month; however, they dropped 0,2% compared to the last year’s level. Harmonized index of consumer prices, calculated according to the common technique of the European Union, rose 2,1% per year and rose 0,2% compared to the previous month. Redbook analytical group informed on Tuesday that index, calculated by the given group, rose 5,2% in the week ended June 5 against the similar week of the previous year. The previous week, ended May 29, index rose 4,6% against the previous year’s indicator. According to Redbook comments, sales of food stuffs, sport goods and garden implements were the most active last week.

The forecast was created by trans1.