Market’s daily review
11:47 05/11/2006

On Wednesday after the announcement of results of FOMC meeting the American currency reached a new low to euro for last year.

 

Federal Open Market Committee made a decision to raise federal funds rate on 0.25 % up to a level of 5.00 %.

The given increase of FRS rate was predicted by the majority of economists, and did not become a surprise for the market’s participants.

The statement, made at the end of FRS Head meeting, was positive therefore the American currency started to be restored.

FRS statement says that the further increase of interest rates can be still necessary.

At the same time a dollar exchange rate was under pressure of significant trade balance and current account deficits.

 

In its turn, economic data from Eurozone continue to support the single currency.

Proficiency of trade balance of Germany, and also industrial output in France was above forecasts.

According to data of the Federal Cabinet of Statistics of Germany trade proficiency in March was up 14.3 billion euro in March from 13.1 billion in February.

Analysts forecast +13.8 billion euro.

 

Current account balance showed proficiency 9.0 billion euro in March against 11.0 billion in February.

It was expected that black ink of current account of Germany in March would make 12.0 billion euro.

 

According to Insee data, adjusted for seasonal variations industrial production of France in March was considerably up 1.6 % in monthly calculation. Economists forecast growth of the given indicator on 0.9 %.

The previous value of the index of industrial production in France has been revised from -0.9 % up to -1.2 % for a month.

 

The wholesale prices index in Germany in April was up 1.0 % for a month.

Year over year wholesale prices were up 3.2 %.

The previous value of the given index made +0.5 % for a month, +2.5 % for a year.

 

Economic data in Great Britain were varied.

On the one hand, a rate of pound was supported by the data testifying to unexpected reduction of trade balance of Great Britain.

At the same time a rate of the British currency was under pressure of the quarterly report of Bank of England, published yesterday.

 

The trade balance of Great Britain for March made -5.5 billion pounds at the forecast -5.8 billion pounds.

February indicator has been revised upwardly from -6.5 billion pounds.

 

Trade balance except for trade with the countries of the European Union in Great Britain for March -2.6 billion pounds at the forecast -3.6 billion pounds.

The previous value made -3.36 billion pounds.

 

According to data of the quarterly report of Bank of England on inflations, forecasts of rates of growth of a national economy were a little below expected levels. Thereof the probability of increase of the basic interest rate in the country this year decreased noticeably.


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