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NEWS / Forex Forecasts

USDCHF,USDCAD Market players’ attention is directed to Bernanke’s first speech.

17:40 02/14/2006

So, for the last day the situation in the market of the basic currencies has not changed. Low activity is explained by dealers as unwillingness of players to transactions before tomorrow's statement of the US FRS Chairman Bernanke, which will be his debut since time his assumption of an office.

 

Let's notice that the market’s players hope that Bernanke will let know that FRS is not going to finish the process of rates increase the nearest months during rates rise.

Bernanke’s statement takes place on Wednesday and Thursday and tomorrow's report is considered as the most important event of this week. Therefore the market does not hurry up with decision-making and, in opinion of the majority of analysts till this moment strong fluctuations in the market are unlikely.

 

As after retirement the US FRS former head Alan Greenspan expressed in his statements very optimistically about prospects of the American economy the majority of the market’s players expect that Bernanke will hold moderate-firm line.

 

On the other hand, little activity of the beginning of the week is explained by sharp worsening of weather conditions at east coast in the USA because of what many market’s participants could not get their jobs.

 

Besides a dollar exchange rate has got the permanent support of the drop in  oil prices which proceeded on Monday. It means that the spring comes, and investors are sure that with the beginning of warming of problems with deliveries will not arise. Iranian nuclear program is of no interest for the market now.

As a result yesterday March futures for oil WTI were down 60 cents to $61.24 per a barrel, and during the tenders the quotation fell up to a minimum of $60.85 since January, 3rd.

 

Let's also notice that results of G8meeting did not become unexpected and almost did not affect quotations of currencies. We shall remind that Ministers of Finance expect preservation of high rates of economic growth this year, and they called for levelling of economic misbalances.

And risks for world economy are high and unstable prices for energy carriers. The text of the communique emphasized that "to improve functioning of the markets and increase their stability we have agreed to strengthen work on dialogue consolidation in sphere of energy policy between manufacturers and consumers".

Another important question of G8 meeting was a problem of debt amortization of the poorest countries. G8 representatives supported activization of liberalization process of world trade within the limits of WTO.

 

Today it is necessary to pay attention to the following:

- Retail sales index in the USA for January at 13:30 GMT. The forecast +1.0 %, the previous value +0.7 %;

- Retail sales index except for car sales in the USA for January the same time. The forecast +0.8 %, the previous value +0.2 %;

And the index of industrial stocks and inventories in the USA for December will be published at 15:00 GMT. The forecast +0.6 %, the previous value +0.5 %.

 

As a result all our last recommendations concerning long-term and medium term purchases of dollar against franc and canadian dollar hold good.

The first purpose of growth of the dollar/franc rate can become 1.3105-35, and then, after a little correction - levels 1.3250-70.

And the nearest purpose of growth of the dollar/canadian rate will likely to be a level 1.1620-30.

 

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