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Forex · News · Forex ForecastsNEWS / Forex Forecasts |
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Dollar correction is possible…Rate dynamics and recommendations on EUR-USD and GBP-USD.
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13:32 08/02/2004
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Dollar correction is possible…Rate dynamics and recommendations on EUR-USD and GBP-USD.
The exchange rate of the dollar is correcting after the release of the contradictory U.S. economy data. On the one hand, the rates of GDP growth turned out to be lower than forecasted and even lower than the previous values, making up 3,7% in the second quarter compared with the revised 4,5% in the first one.
Economists think that prices for energy that stayed record high for the whole second half year were one of the main reasons of economic slow down. September futures for Brent oil grade rose to $40,05 per barrel on Friday. Friday level was the highest since October 1990, when prices reached $40,95, as the world expected a war with Iraq. American “light” oil futures with shipment in September set this year’s record of $43,92 per barrel.
On the other hand, Michigan sentiment index shows that the level of consumer spending rose in July in the U.S. compared with the previous month. Data came out higher than forecasted:
- Michigan sentiment index, expectations 91,2 against 88,5 in June;
- Michigan sentiment index, 96,7 against 95,6 in June.
Business sentiment index showed growth of its indicators compared with the previous month:
- July, Chicago PMI: business activity index in production is 69,7 against 56,4 in June;
- July, Chicago PMI: business activity index is 64,7 against 56,4 in June;
July, Chicago PMI: business activity index, new orders are 68,7 against 56,8 in June.
However, index component, indicating employment, was lower than that a month earlier:
July, Chicago PMI: business activity index, employment is 45,6 against 53,6 in June.
Today, political factor put the pressure on the exchange rate of the dollar. Due to militant threats, the U.S. Administration increased the danger level indicator to ”high” for the financial sector of New York and Washington.
Meanwhile, the European currencies are supported by positive EU and British data:
- the European Union, July: business activity index new orders are 56,1 against 55,9 in June;
- the European Union, July: business activity index production is 57,1 against 56,0 in June;
- the European Union, July: business activity index is 54,7 against 54,4 in June;
- Britain, July: business activity index employment is 51,5 against 50,4 in June;
- Britain, July: business activity index inner prices are 65,2 against 64,4 in June;
- Britain, July: business activity index export orders are 54,2;
- Britain, July: business activity index new orders are 58,1;
- Britain, July: business activity index production 59,5 against 57,9 in June;
- Britain, July: business activity index is at its highest since October 1994;
- Britain, July: business activity index is 56,3 against 54,5 in June.
Recommendations: it is better to stay out of the market and close current positions on the background of such contradictory data.
Recommendations: it is better to stay out of the market and close current positions on the background of such contradictory data.
The forecast was created by trans1.
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