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Forex · News · Forex ForecastsNEWS / Forex Forecasts |
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Rate dynamics and recommendations on EUR-USD and GBP-USD.
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08:18 06/15/2004
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Rate dynamics and recommendations on EUR-USD and GBP-USD.
The rate of the dollar is in a dual position today.
On the one hand, we have FRS rate hike expectations that were strengthened by statements made by FRS chairman Alan Greenspan. Now, investors have almost no doubts that the rate will be raised 50 points higher at the end of the month. Earlier, it was forecasted that the rate would be raised only 25 base points.
Retails sales in the U.S. in May made up +1,2% (forecasted +1.0%, the previous value was revised from –0,5% to –0,6%). The given index showed consumer demand rise in May. Retail sales excluding auto, made up +0,7% in the U.S. in May (forecasted +0.4%; previous index equaled –0.1%).
The given data strengthened investors’ confidence in FRS rate hike.
On the other hand, negative data on foreign trade balance negatively affected dollar quotations against major currencies. The U.S. Department of Trade reported that the deficit of foreign trade balance made up $48,33 billion in May against the previous $46,57 billion. The average forecast equaled $45 billion. High consumer demand and negative surplus gains were influenced by increased demand for oil, conditioned by high prices for the given mineral resources used as sources of power.
The components of foreign trade balance in trading with China also increased – the deficit made up $11,98 billion against $10,44 billion.
Today, we are expecting the release of the following market indicators:
Business inventories in the U.S. in April (previous index equaled +0.7%);
NY Fed Empire State manufacturing index in the U.S. in June (previous value equaled 30.2);
Preliminary value of Michigan sentiment index in the U.S. in June (forecasted 90.5, previous value equaled 90.2).
The whole stock exchange strategy for the near future will have the listed above indicators, as its foundation. In case the listed above data come out positive, downtrend direction will remain and pullback that we all saw yesterday could be regarded, as trend correction. In case of negative data, the rate of the Euro, as well as the rate of pound sterling might return to its original point.
Recommendations: keep strategy short on EUR and GBP, arranging stop at break-even.
Recommendations: keep strategy short on EUR and GBP, arranging stop at break-even.
The forecast was created by trans1.
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