Events of the last week showed that positive fundamental releases over the USA did not help the dollar.

Unexpectedly positive trade balance data caused though strong but only short-term splash in activity of dollar purchases.

According to the report of the Census Bureau and the Bureau of Economic Analysis of the Department of Commerce deficit on the foreign trade balance reduced unexpectedly to $62,0 billion from $65,7 billion, exchange experts forecast growth of deficit to $67,0 billion

It is the lowest indicator since August of the last year and the second straight month s when narrowing of a corridor between the US import and export volumes is observed.

Drop in deficit of the foreign trade operations for the first time for last year happened due to growth of total amount of export for March and import decline that is a characteristic and positive sign. Export increased by 2,2 billion up to $114,7 billion and import dipped $1,5 billion to $ 176.7 billion

Volumes oil import fell 9 % in the March, however the increased seasonal demand in April according to experts’ estimations will affect growth of trade balance in April.

Despite reduction of deficiency within 2 months in a row for the first 3 months of this year the US trade balance gap made $196.2 billion, threatening to exceed a record maximum of the last year $723.6 billion.

Economists consider that strengthening of economies of Europe and Asia together with current dollar devaluation can warm up even greater demand for export from the USA the nearest months. Besides narrowing of trade deficiency in March can induce some experts to revise upwardly the forecasts of economic growth of the USA in 1 quarter.

However general dynamics of decrease in deficiency has not affected deficiency between the countries of the Asian region. Especially with China, the share of all import volume makes more than quarter of the whole volume.

The report showed record growth of deficit with China to $15,6 billion in March from $13,8 billion in February, with the European Union $10,1 billion from $8,3 billion, with OPEC countries to $8,1 billion from $7,3 billion.

However the positive on trade balance has been saddened by slump of consumers’ confidence in May. According to preliminary estimations of u University of Michigan the Sentiment Index fell unexpectedly 8,4 points to 79 points in Ma from 87,4 points in April whereas experts assumed decrease in moods on 1,4 points to 86,0.

The index of an estimation of current conditions decreased to 96.2 from 109.2, and the index of expectations - to 68.0 from 73.4. Both indicators also became minimal since October. Thus the index of current conditions fell off at maximal rates for all 28-years of history of research existence.

Market experts connect decrease in consumer sentiment with a galloping rise in petroleum prices when the share of family budgets which is spent for petroleum, has noticeably increased, despite the total growth of average hourly payments.

Speaking about the nearest prospects it is not necessary to charge the dollar yet. Quotations are entering rather viscous zone: a currency corridor 1,2800-1,3100. You should not forget that fact that the US economy shows quite good results for the 1 half of 2006 year. All these make deep correction from these levels quite probable.

It is necessary to watch closely the indicators of an investment climate of the USA. Data on foreign investments will be issued next week on Tuesday.

If after drop in deficit of the US trade relations data show significant rise dollar bulls will get a good chance to recoup.

On Friday intraday recommendations the trade balance showed unexpected decline, that is it is better than forecasts and better than the previous values. Up to $62,0 billion in March from $65,7 billion in February exchange experts forecast growth of deficit up to $67,0 billion. Position opened from 1,2909 on euro and from 1,8938 on pound sterling and were closed +40.

On long-term positions we continue to remain outside the market.