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Forex · News · Forex Forecasts

NEWS / Forex Forecasts

USDCHF,USDCAD Before next series of data dollar remains vulnerable...

12:06 03/16/2006

So, in spite of the fact that the net foreign purchases of the American assets in January grew in comparison with December, and made 66.0 billion dollars against the previous value of 53.8 billion dollars, the dollar took in this message negatively.

Let's remind that earlier in December, 2005 net foreign purchases to the USA was estimated in $56.6 billion, and economists forecast January indicator at a level of $65.0 billion.

Thus net volume of purchase state bonds of the USA made $4.4 billion in January vs. $18.3 billion in December, corporate bonds - $25.8 billion vs. $35.2 billion, shares - $21.2 billion vs. $9.5 billion.

 

As a result it became obvious to the market gamblers that foreign purchases was less than it is required for financing trade balance deficit in January which was record.

As the market has already considered increase of FRS rates in March and May by current quotations, therefore any negative economic data affect the market painfully.

 

Besides some analysts consider the reason of yesterday's falling pressure upon the market data of decrease in retail sales in February, and also weak data of the yesterday's "Beige book" survey.

Let's remind that according to this "Beige book" economic survey of the US Federal reserve system in January and February a level of retail prices rose slightly. Thus rate of growth of the American economy is moderate, and the volume of consumer expenses continues to increase.

Let's also remind that the import prices in the USA in February were down 0.5 % in monthly calculation. Thus the export prices in February did not change.

And the import prices, except for petroleum prices, were down 0.5 % m/m in February that became the maximal decline since April 2004.

Experts forecast that the import prices would be down 0.5 percents m/m in February and the rise in export prices would make 0.2 %. In January import prices were up 1.4 % m/m.

 

Analyzing the issued data, many experts have come to conclusion that the insignificant rise in prices can become a signal of that process of aggressive increase of the US interest rates will finish soon.

 

Let's notice that yesterday additional uncertainty among gamblers arose due to comments of FRS Head Ben Bernanke that the government’d better take concrete steps on reduction of the budget deficit.

Bernanke has noted that one of factors increasing deficiency is continuation of growth of the population of the country. FRS Head has noted " the budget deficit stamps out growth of national savings and real capital accumulation. As a result it can lead to a standard of living decline in our country in future."

 

Let's remind that today at 13:30 GMT the next series of data will be published:

- jobless claims in the USA for a week on 11.03. The forecast 295.000, the previous value 303.000;

- consumer price index in the USA for February. The forecast +0.2 % for a month, the previous value +0.7 % for a month, +4.0 % for a year;

- consumer price index except for prices for food and energy in the USA for February. The forecast +0.2 % for a month, the previous value +0.2 % for a month, +2.1 % for a year;

- housing starts in million in the USA for February. The forecast 2.040, the previous value 2.276;

- building permits in million in the USA for February. The forecast 2.120, the previous value 2.217.

 

And later, at 17:00 GMT Philadelphia Federal Reserve Bank index in the USA for March will be issued. The forecast 12.0, and the previous value it was 15.4.

 

And again, considering importance of coming data, we recommend to be still outside of the market. Weakness of these data can deepen the begun correction of the basic currencies against the dollar.

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