Brief review of the market. by OpenForex.com

news

job

forum

Forex · News · Forex Forecasts

NEWS / Forex Forecasts

Brief review of the market.

08:13 06/16/2004

Brief review of the market. On Tuesday, the rate of American dollar declined against major currencies following the release of data on inflation in the U.S. and FRS chairman’s testimony. Yesterday, FRS chairman Greenspan stated that inflation was of no special concern in the near perspective. That means that interest rates would be raised gradually in the U.S. The given statement followed the release of CPI in the U.S., which made up 0,6% in May, thus only insignificantly exceeding average forecasts. Weak CPI reduced the possibility of strong interest rate hike in the U.S. On Tuesday, the U.S. Department of Labor reported that CPI, indicator of inflation in retail sphere, rose 0.6% in May compared to April. The received indictor exceeded the average forecast that presupposed 0,4% gain. However, base component of CPI, not including often-volatile costs for food and energy, rose 0,2% in May, as forecasted by economists. In the last 13 months that ended in May, base component of CPI rose 1,7%. Retail prices for energy rose 4,6% in Amy, whereas prices for gaz rose 8,1%. In June, retail prices for gaz started their downward movement in the U.S. On Tuesday, the U.S. Department of Trade said foreign investors purchased American assets for the sum of 76.2 billion dollars in April (previous value equaled 80.7 billion dollars). It had been noted that the given sum was enough for reimbursing the deficit of payments balance in the U.S. The given information can render some support to the rate of the dollar. NY Fed Empire State manufacturing index for June made up 30.2 not having changed since May and having remained on a high level. Record value of the index was recorded in February and equaled 42,05. Index component, reflecting new orders in industrial sector of New York and its region, dropped from 36.6 in May to 26,5 in June. Component, reflecting current supplies, dropped from 42,3 to 33,43. Component, reflecting paid prices, fell from 56,7 to 52,6. Component, reflecting received prices, rose from 17,5 to 20,7, pointing that production companies of New York and its region are regaining their ability to raise prices. Component, reflecting the number of employed in the production sector of the region, dropped from 21,3 to 12,9. Component, reflecting working week duration, dropped from 20,8 to 10,8. On Tuesday, the U.S. Department of Trade said business inventories of American companies rose 0,5% to $1,212 billion in April compared to March. The given indicator had risen for the eighth straight month and reached hit new record. In March, business inventories had risen 0,7%. The overall data on business inventories include producers, wholesale and retail companies indicators. Preliminary value of Michigan sentiments index for May made up 95,2, having risen compared to May value that equaled 90,2. In average, had looked for 89,9 dip. Michigan sentiments index component, reflecting consumers’ attitude in terms of their current financial standing, rose from 103,6 in May to 108,1 at the beginning of June. That is the highest index value since January. Component, reflecting consumers’ expectations for the nearest six months, rose from 81,6 to 86,9 at the beginning of June. In Britain, home prices slowed down their rise for the first time in three months, including May, as rate hike perspective reduced existing demand. The Bank of England manager, Mervyn King, warned about possible reduction of market cost of homes. When making a speech before Glasgow businessmen in Scotland, he said that housing market showed signs of slowing down the tempo of its growth. Prices had been rising at a high rate this year and now they have all the chances to fall down. Analysts note that statements like that strengthen rate hike expectations in Britain and investors hope that rates will continue to rise. Concerned about rising consumer debt, Central Bank of Britain had been raising the rates a quarter higher in November, February, May and June, bringing it up to 4,5%, which is the highest in 2,5 years. Harmonized CPI made up +1.5% per year in May in Britain, whereas forecasted +1.5% per year. The previous value of the given index equaled +1.2% per year. \"RPI-X\" inflationary index made up +2.3% per year in May in Britain, which coincides with the forecast. In Britain, retail prices made up +0.4% per month, +2.8% per year in May against previous +0.6% per month, +2.5% per year. All the indicators came out, as earlier forecasted.

The forecast was created by trans1.