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Forex · News · Forex ForecastsNEWS / Forex Forecasts |
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Brief review of the market.
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17:49 06/21/2004
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Brief review of the market.
At the end of last week, the rate of the dollar weakened against the Euro and pound sterling.
Decline of American currency strengthened following data release on bigger than expected deficit of balance of payments in the U.S.
It had been noted that U.S. balance of payments was on a record level, which might mean the necessity of weakening currency for covering deficit.
Meanwhile, the perspective of raising FRS interest rates gradually and increasing attractiveness of American currency to foreign investors keeps supporting the dollar against other currencies.
Despite record deficit, rate hike should attract more foreign capital, which is needed for financing debts.
The U.S. Department of Trade said current operations deficit reached record level of $144,9 billion in the first quarter compared to $127,0 billion in the IV quarter of 2003.
The received figure was a record one and exceeded average forecast of economists.
Economists thought American balance of payments would equal 141 billion dollars in the first quarter against 127 billion dollars in the previous period.
Rise of current account in the first quarter was conditioned by increase in imports and exports gap in the U.S.
The difference between exports and imports equaled $150,8 billion in the first quarter against $139,4 billion.
Current account deficit was compensated by inflow of capital in the U.S.
The overall volume of American assets, belonging to foreigners, had risen $447,6 billion in the first quarter after $230,3 billion gain in the IV quarter.
Taking into account foreign securities, sold to Americans by foreigners, inflow of capital made up 251,3 billion dollars in the U.S. in the first quarter, which is much higher than deficit of current account.
In Britain, budget deficit made up +3.06 billion pounds in May, whereas forecasted +5.10 billion pounds.
The previous value equaled –2.23 billion pounds.
Preliminary value of money supply index M4 made up +1.2% per month, +7.9% per year in Britain in May against previous +0.5% per month, +7.7% per year.
The forecast was created by trans1.
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