Ben Bernanke has justified the market’s opinion that he is more predictable politician than his predecessor Allan Greenspan.
There are several key points in the testimony of FRS new head.
First of all, Ben Bernanke noted forward rates of economic development, which received a good dynamic impulse at the beginning of 2003.
In 2005 growth of gross domestic product made more than 3 percents. The total nonfarm payrolls made 2 million, the unemployment rate fell below 5 percents. Productivity grew at progressive pace.
He also said that economy achieved such successes, despite the essential obstacles caused by a series of hurricanes at the end of summer and at the beginning of autumn of 2005, and also by the high prices for the energy carriers because of rise in world oil demand.
The second key point became Ben Bernanke's estimation of inflation. Has told that pressures of inflation increased in 2005. Hiking prices for energy rose total inflation, lifted business expenses, and lessened house budgets of Americans. However, the increase of personal consumer expenses, except for foodstuffs and energy, only below 2 percents, remains moderate, and long-term expectations of inflation were kept in a controlled range.
Proceeding from these two factors, stable economic growth can demand additional interest rates rise to limit inflation.
Ben Bernnke’s cycle of statements did not finish on that – today there is expected the speech of FRS new head in the Senate. As a whole the positive mood, which sounded in B.Bernanke’s testimony the market regarded as the positive factor for the dollar.
One more important factor - a condition of the oil market keeps supporting dollar.
The oil prices dipped on Wednesday, having increased the 15 % decrease of last two weeks as dealers concentrated their attention on growth of stocks of energy carriers in the USA.
The governmental report showed on Wednesday that petroleum stocks grew up to a maximum level since 1999 when the prices for the energy goods were close to historical minimum.
Futures for oil light sweet were down$1.92 before closing at a mark $57.65 for barrel, having added over $10 to losses since the end of January. Oil Brent was closed at a level $58.15, having fallen in price on $1.37.
However the positive on dollar was poised by quite weak indicators on foreign purchases to the USA and a little bit decreased manufacture indicators.
As the US Exchequer Department informed foreign purchases to the USA reduced to $56.6 billion in December after they reached the revised $91.6 billion in November.
Reduction was basically happened because of cut of exchequer bonds purchases by private investors. Investors bought $12.7 billion exchequer bonds in December against $50.8 billion in November.
The official organizations bought $5.6 billion exchequer bonds in December, that is above $3.7 billion in November.
The American investors improved their purchases of the international securities in December, having bought $17.6 billion bonds and securities of the international issue.
The production volume at factories, mines and the municipal enterprises was down 0.2 % against the revised +0.9 % in December, and is above the published before. Capacity utilization made 80.9 % against 81.2 % in December (the peak since September 2000).
The dollar position remains more preferable. However the market has not yet received stronger factors for growth and could not overcome strong support lines. Therefore while we remain outside of the market.
