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NEWS / Forex Forecasts

Daily review of the market.

05:47 08/11/2004

Daily review of the market. American currency stabilized after Friday fall that was caused by weak data on the U.S. Labor market. Consolidation of currencies is connected with the expectations of the key event – the Federal Open Market meeting and discount rate decision as a result of it. The majority of analysts think that the FRS will raise the cost of credits again, notwithstanding the signs of economy’s weakening. In the U.S. in June, wholesale inventories increased in the U.S., whereas the volume of wholesale remained unchanged. In June, wholesale inventories gained 1.1% after May’s 1.4% increase. However, the volume of wholesales did not change in June after gain in 0.3% in May. That is the weakest indicator since May 2003. Durable goods inventories rose by 1.4% in June compared with 1.9% in May. In June, bulk selling of durable goods made up 0.5%, not having changed since May. Auto inventories increased by 0.8% in June, whereas sales rose by 1%. Non-durable goods inventories rose 0.6% in June following 0.7% in May. Non-durable goods’ sales dropped 0.6% in June against 0.5% in May. Fuel sales dropped by 1.3%. Wholesale inventories came out higher than expected, which can, possibly, contribute to revising GDP to the point of rising by 0.2%. The rate of British pound stays stable following the release of PPI data, which reflect stable growth of net output. In Britain, PPI output made up +0.1% per month, +2.5% per year in July, whereas forecasted +0.2% per month. The previous value of the given index equaled +0.1% per month, +2.6% per year. In Britain, PPI Input made up +0.6% per month, +3.2% per year in July against the previous –1.6% per month, +3.4% per year. Gain in +0.8% per month was expected. PPI Output, excluding food, tobacco, alcohol and fuel, made up +0.3% per month, +1.6% per year in Britain in July. Index was expected to rise by 0.1% per month. Last month, the given index equaled -0.1% per month, +1.4% per year. Annual value of the indicator is the maximum in the last eight years. In Britain, housing prices rose by 13.9% compared with the previous year and against 12.2% in May. In May-June period, prices rose by 1,8%, whereas the rate had risen by 0.2% only in the same period a year earlier. Japanese currency is getting weaker, despite June’s strong data on net orders for machine equipment, which makes us assume that industry is recovering at a good pace. Engineering orders index rose by 3.9% in June compared with the previous month, which is much higher than the average forecasts. Forecasts had looked for 1.2% gain per month. Net orders rose by 10.4% annual rate. The listed above data is of great importance before Friday release of GDP in Japan in the second quarter. Money supply index made up +1.9% per year in July in Japan. The previous value was revised from +1.8% to +1.7% per year. High prices for oil and news about nuclear rig’s leakage negatively affect the yen.

The forecast was created by trans1.