Dollar bears prevail in the market. The dollar falls on a background of the mixed fundamental data.
FRS report on current economic conditions - the Beige Book - an informal estimation of the US economy, received and generalized by FRS from the independent research Centers and business representatives, was a little bit ambiguous and has been regarded by the market as dollar-negative.
According to all Federal Banks of all of FRS 12 districts, business activity keeps extending. Three Federal Banks of the cities of Minneapolis, Kansas City and San Francisco estimate growth in their districts as "firm" while other districts estimate growth of economy from "modest" up to "moderate" and "steady".
The majority of Districts indicate delay in a manufacturing industry. Retail sales also show decrease in comparison with data of the similar period of the last year.
Service sphere shows rise. In sectors of medical service and transportation, according to data almost all Districts, activity extends.
However the alarm is caused by a labor market, the intense situation develops in the market of skilled workers. The rise in energy prices makes corporations to limit other expense items, including labor items.
All Districts notice delay of growth of housing market, and this factor is one of components in FRS decision on rates.
Dealers have practically ignored yesterday positive data on Durable Goods Orders and New Home Sales.
According to the Durable Goods Orders report of the Census Bureau of the Department of Commerce :
Goods and equipment orders with working life from several years were up 6.1 % maximally since May, 2005, to $230.6 billion in March after growth on the revised 3.4 % in February. Less Defense & less Transport orders were up 2.8 % after February drop of 1.1 %.
Analysts expected that durable orders would grow 1.8 % up to $219.6 billion, according to the average forecast of 68 economists, surveyed by Bloomberg, after earlier informed 2.7 % of orders’ growth in February.
According to the New Home Sales report of the Department of Commerce were up 13.8 % maximally since April, 1993, having exceeded forecasts, to annual value 1.213 million houses against 1.066 million in February, the US Department of Commerce has informed today. The average price for houses dipped 2.2 % in comparison with $224,200 in March of the last year.
The euro is supported by firm opinion in the market about increase of ECB rate in the near future. This opinion strengthened after the statement of the representative of European Central Bank.
The member of ECB Governing Council Lorentso Bini Smaghi has declared today that ECB is ready to raise discount rates to fight against inflation if economic restoration in Eurozone continues to rise.
Bini Smaghi answered to Italian daily Il Messaggero journalists’ question whether ECB was going to raise discount rates on 0.25 % in June that was predicted by economists.
Technical picture.
Euro quotations are consolidated above a level 1,240. The medium-term uptrend on euro has entered more active period, steeper angle of trend line speaks about that.
The previous recommendations hold good:
“On pound sterling the deferred orders from a level 1,7950 with the first purpose 1,8050 and the second 1,8350. Stop is not closer than 100 points.
On euro Longs from a level 1,2400 are kept, with the first short purpose 1,2470 to close at a current rate, the order with a long-term purpose (1,2580) is kept, stop is kept at 1,2350.”
