Eurodollar quotations proceed balancing near strong support levels of 1,2000 and 1,2065 on a background mixed on influence on the news market. 

According to FRS economic review - Beige Book: Economic activity in the USA has grown at the moderate pace in all regions for the last 6 weeks.

During holidays retail sales rose in majority of the regions though price discounts were different. Cars sales were "reduced". The housing market and commercial credit went up, however consumer credit reduced a little. The energy sector showed quite strong data, reconstruction of the regions damaged by the hurricane "Katherine", has proceeded. Growth on a labor market remained moderate, as well as the wage- push as a whole.

The news from the US on international capital flows “have played” rather con than Pro dollar. In November the capital flows to the country reduced up to $89.1 billion against an October indicator, which has been revised up to $104.2 billion. Net purchases of long-term shares of the USA have made $103.2 billion. Private investors have made purchases for the sum $97.3 billion, and foreign state institutions - for the sum $5.9 billion.

In November the American investors bought foreign shares for $14.1 billion. The share of treasury securities bought by China and Japan increased in November after October falling. So, China’s share has made $249.8 billion against $247.6 in October. Japan was the holder of treasury securities for the sum $682.8 billion against $681.7 the last month. The UK, the countries of the Caribbean basin, OPEC countries, Italy, France, Norway and other states have increased their US security holdings. So, the share of Britain rose up to $223.2 billion against $187.9 billion in October.

At the same time Israel, the Netherlands, Ireland, Taiwan, Hong Kong and Luxembourg have reduced their American security holdings.

The oil market keeps putting pressure upon dollar.

At morning tenders on Wednesday crude oil futures raised almost up to $67 for barrel because of the diversions on an oil pipeline in Nigeria and Iran’s nuclear ambitions, which continue to dispirit the market. According to all available information, February futures for the American crude oil rose in price on 46 cents up to $66.77 for barrel, having noted a peak on $66.93 earlier, that became a maximum since October, 3rd.

The reduction of the US CPI has been apprehended by the market a little bit differently. According to the report of the Department of Labor of the USA, published today, in December consumer price inflation unexpectedly dipped on 0.1 % as the prices for energy continued to depart from September peaks. The economists, surveyed by MarketWatch, expected that CPI would grow 0.2 %. This index reduction was the second in a row - in November it also fell on 0.6 %. Two drops in a row has not been observed for two years. So sudden dip of inflation at the end of year can make FRS to finish a cycle of monetary toughening after 14-th rate increase on January, 31st. Now the markets expect the end of toughening after one more increase in March.

Correction of uptrend on euro and especially on pound sterling has more likely been caused not by dollar force, but by weakness of the European currencies.

The PPI in Germany has unexpected hiked, having caused market players’ fears concerning the probable strengthening of inflationary pressure upon economy. The producer price index in Germany rose 0.3 % in December to November and increased 5.2 % for the same period of the last year, the Federal bureau of statistics has informed. Economists forecasted growth on 0.2% m/m and increase on 5.1 % y/y. The producer price index made 112.8 in December from 112.5 in November and 107.2 in December the last year (in 2000 it was equal to 100). For the whole 2005, the producer prices raised 4.6 % up to the year 2004. It is the maximal growth since 1982

Risks on FOREX remain balanced. In absence of strong news the market is slack - these days the tenders are dull, therefore now it is not recommended active movements.