|
 |
Forex · News · Forex ForecastsNEWS / Forex Forecasts |
|
|
|
|
|
|
|
The dollar continues to get stronger…Rate dynamics and recommendations on EUR-USD and GBP-USD.
|
|
13:46 07/26/2004
|
|
The dollar continues to get stronger…Rate dynamics and recommendations on EUR-USD and GBP-USD.
Today’s session started under the impression of Alan Greenspan’s speech in Congress. On the background of news stream that is poor for events this only event is the head news of the day. The dollar is definitely getting stronger on the Euro.
Investors’ assurance is firm, as it was fed by the words of the head guru of financial markets – Alan Greenspan. In his two-day speech made last week, FRS head gave a positive evaluation of economic development pace. He also noted that production growth was gradual, which was proved by first quarter reports on lagging market indicators – unemployment rate indexes and non-farm payrolls. Alan Greenspan said that FRS would act within the frame of accepted monetary policy and refinancing rates would rise gradually. The last was positively interpreted by the market as a signal to dollar strengthening, because as the rates rose, investment attractiveness of the U.S. national currency increased, thus increasing the inflow of investments in the advancing economy.
On the background of dollar-positive news, news on the Eurozone came out negative. As German government reports, prices for German imports dropped by 0.6% m/m in June against the forecasted –0.3% m/m. Annual growth made up 2.0% against +2.5% y/y in May. June reduction was mainly caused by 4.9% m/m fall in prices for raw oil and 6.4% m/m dip in prices for oil products. Excluding prices for oil, import prices dropped by 0.2% m/m for the second straight month, though annual norm rose to +0.4% y/y from +0.3%.
The report also shows that spring increase in import prices (excluding prices for energy), slowed down steeply in May and June.
Pound sterling declined against the dollar not as significantly, as against the Euro. It still remains on the serious level of support at 1,83. Pound sterling is supported by two facts. The first one is expectations that the Bank of England would raise refinancing rate target, which is now on a rather high level compared to those countries, which currencies make up a lion’s share of Forex market (Japan, USA and the EU countries). In England, rising prices for real estate force Central Bank of Britain take measures on protecting economy from inflationary threats by raising refinancing rate target. The second factor is high prices for oil. Oil prices for the nearest supply month rose according to the results of July 23, 2004 trades. At International Petroleum Exchange (London), prices for Brent oil make made up $38,27 (+$0,26) per barrel. At New York Merchantile Exchange (New York), supply prices for Light Sweet Crude oil make equaled $41,71 (+$0,35) per barrel. As a rule, high prices for oil always support the rate of pound sterling, as about one third of blue chips of England’s stock exchange market are British oil corporations. By 12:00 Moscow time, prices for August Brent oil make rose by 13 cents to $38,40 per barrel. Prices for futures for American light oil increased by 3 cents to $41,74 per barrel. Major factors that influenced the market were fire at the largest oil-processing factory, Miro, in Germany and concerns that there might be cut in oil shipments from Iraq and from Russian oil giant UKOS. Meanwhile, OPEC countries declared that oil extraction was at its maximum and no further rise in quotas was planned.
Recommendations: it is better to stay out of the market so far, as quotations on the Euro and pound sterling are close to strong levels of support.
Recommendations: it is better to stay out of the market so far, as quotations on the Euro and pound sterling are close to strong levels of support.
The forecast was created by trans1.
|
|
 Printer-Friendly Version
 Send This Page
 Add to Favorites
 Comments
|
|
|
|
|
|
|
|
|
|
 |
|
|
|
|
|
