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Forex · News · Forex Forecasts

NEWS / Forex Forecasts

Market’s daily review

11:47 01/04/2006

On Tuesday, in conditions of the thin market the American currency dipped sharply against the basic world currencies.

Analysts notice that dollar exchange rate has been influenced negatively by falling business index in the USA and data of the US FRS FOMC minutes of last meeting.

According to the minutes from the December, 13th, published on Tuesday, the majority of FOMC members believe that it is necessary for FRS to undertake some steps to increase the interest rate completely to control inflation.

However, Committee members divided in opinions about that how many times it would be necessary to raise the interest rates. It is connected with that the federal funds rate has come near  a neutral level, and the risk of growth of the inflation rate has decreased.

The ISM index in the USA made 54.2 for December  at the forecast 57.5.

The previous value made 58.1.

The indicator has been considerably below than the forecast and has reached a minimum level for almost four months.

In its turn, the single European currency has risen almost on 220 points within day.

Significant growth of the European currency was also promoted by low volumes of transactions.

 

An obvious sign of revival of European economy became growth of business index up to a maximum for the last 16 months.

Adjusted for seasonal variations the index in Eurozone has reached 53.6 against not revised 52.8 in November. Analysts predicted growth up to 53.4.

It became the maximal parameter since August, 2004 and possibly raised even more expectations that the European central bank would continue the interest rate increase this year. At the beginning of December ECB increased rate of refinancing on 25 basic points up to 2.25 % that became the first increase for five years.

The business index in industrial sector in France adjusted for seasonal variations rose up to 52.2 in December from 51.8 in November.

Growth has exceeded the market’s expectations, analysts forecasted growth up to 52.1 in December.

The business index in Italy made 54.1 for December against the previous value 53.1.

The number of jobless in Germany adjusted for seasonal variations fell to 110 000 in December to November. Economists assumed falling on 53 000.

Without seasonal correction the general number of jobless came up on 4 606 062 in December against 4 531 213 in November, correspondingly the unemployment rate grew to 11.1 % from 10.9 % in November.

The British pound could also rise almost on 200 points against dollar, benefiting basically from the general letdown of the American currency.

According to the data published by the British state institute on purchases and supply, in December an industrial activity index in the country slightly grew in connection with new orders growth.

Compound PMI index climbed to 51.1 in December from 51.0 in November. For the same period the new orders component grew to 53.2 from 52.3.

According to the preliminary, seasonably adjusted data of Bank of England, in December the money supply indicator ?0 raised on 0.4 % for a month, as a result the annual rate of growth made 5.0 %.

The last indicator decreased in comparison with growth on 5.3 % year over year in November, and also in comparison with values for September and October.
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