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Forex · News · USMarketNEWS / USMarket |
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Market is at thought…Rate dynamics and recommendations on EUR-USD and GBP-USD.
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13:26 06/22/2004
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Market is at thought…Rate dynamics and recommendations on EUR-USD and GBP-USD.
Exchange market players slow down their activity prior to FRS and the Bank of England meetings. The member of Board of Governors, Bernanke, noted that the level of inflation got slightly higher and that concerns the heads of governmental financial departments. Rate hike is one of inflationary risk reduction measures. When asked what rate he thinks to be eligible for the given situation, Bernanke answered from 1% up to 2%.
This week the Bank of England is to meet upon refinancing rate hike issue and will also discuss the problem of restraining inflationary growth. Officials are concerned that rise of prices, first of all, in construction sphere and mortgage crediting rates’ hike can restrain inflationary pressure in that sphere. Minutes of the meeting will be published on Wednesday. Investors fear that rate hike decision will be made less resolutely due to stabilization of the real estate market situation, i.e. reduction of price rise dynamics in the year 2004 compared to the previous year.
There appeared rumors about currency intervention that is being prepared by the yen. Weak ness of the dollar negatively affects Japanese economy, as Japan is concerned about deflation problem and refinancing rates are on 0 level.
Recommendations: keep long-term positions on EUR, as well as on USD, arranging protective stops at break-even.
Recommendations: keep long-term positions on EUR, as well as on USD, arranging protective stops at break-even.
The forecast was created by trans1.
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