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Forex · News · Forex ForecastsNEWS / Forex Forecasts |
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Brief review of the market.
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13:26 06/22/2004
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Brief review of the market.
On Monday, the dollar recovered a bit after Friday fall caused by data on payments balance deficit in the first quarter in the U.S.
However, American currency is still at a rather low level, as the U.S. budget deficit situation has a great impact on it.
Perspective of raising the rate 25 point higher keeps the dollar from serious fall.
Meanwhile, statements made by some ECB officials, saying that there is no need raising interest rates in Europe (12) in the nearest perspective, put pressure on the Euro. Opinions like that were expressed by ECB chief economist Issing and members of ECB Board of Governors Weber and Liebscher.
When making a speech at a conference in Vienna, Liebscher said that he shared world community concerns upon rise in prices for oil and influence that they produce on inflation, though he was optimistic about general perspective of Eurozone economic advance.
As for inflation concerns, Liebscher agreed with Otmar Issing’s opinion expressed in an interview on Monday. “I am concerned about further movement of oil prices and the effect they produce on economic advance and price stability”- said Liebscher, pointing that “there was no need dramatizing” the situation.
Anyway, noted Liebscher, ECB is not giving up its analysis of monetary policy.
“We still stick to the opinion that we will acquire price stability in medium-term period”, - said Liebscher, adding that he was optimistic about stable recovery of Eurozone economy.
The rate of yen rose yesterday against major currencies.
Significant strengthening of the yen was conditioned by 2% Nikkey index rise and due to expecting near release of Tankan economic report, which must show stable growth of Japanese economy.
Market still tries to forecast the pace of FRS discount rate hike, which could have increased inflow of foreign capital to dollar assets, which, in its turn, could have reduced concerns about the U.S. balance of payments.
This week, investors are expecting the release of important indicators on U.S. economy. They are durable goods orders, existing and new home sales and consumer sentiments.
The forecast was created by trans1.
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