| USDCHF,USDCAD Accompanying FOMC instruction assumes "pauses" at next FRS meeting... |
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17:07 10/26/2006 |
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So, as well as it was predicted by overwhelming majority of experts at yesterday's meeting FOMC made a decision to leave the basic interest rates in the country at a former level. As a result the interest rate on federal funds remained at a level of 5.25 %. Ten committee members, including Pool, voted for preservation of the rate while Richmond FRB President Lacker already the third time voted for its increase by 0.25 %.
However focus of players’ attention yesterday was concentrated on FOMC final statement. We remind that in the document there was stated that in spite of the fact that inflationary risks from the high prices for energy and raw material reduced noticeably, however rates of the US economic growth continue to decrease smoothly. Thus to keep an intrigue in the market Committee members kept the traditional formulation that some inflationary risks remain, and repeated that a degree and time of any additional toughening of a monetary policy which is required for decrease in these risks, will depend on change of a current situation in economy.
And a result of the analysis of the document by experts was opinion that FRS does not plan to increase a level of the basic interest rates nearest months that has put pressure upon a dollar exchange rate.
Let's remind that published yesterday before promulgation of results of FOMC meeting, data on existing home sales in the USA for September also did not add a positive in a coin box of dollar. So, value of the parameter made 6.18 million, at the forecast 6.35 million, and the previous value 6.30 million.
And today at 14:00 GMT the attention of players will be directed to the publication of data new home sales in the USA for September. We remind that the forecast of value is 1.030 thousand, and the previous value was 1.050 thousand. Market’s participants keep pessimistic expectations of the report. At the same time players find out data on help-wanted index in the USA for September. The forecast 31, the previous value 31.
Besides at 12:30 GMT the follaowing data will be published: - Jobless claims in the USA for a week by 21.10. The forecast 310 thousand, and the previous value 299 thousand; - Durable orders index in the USA for September. The forecast of +4.5 %, and the previous value -0.5 %. - Let's remind that we still expect the beginning of long-term drop in a dollar exchange rate already in the near future. Reaction of the market to yesterday's events gives the basis to believe, that players, for a choice of the further vector of trade, will prefer to wait for key data of the week - Friday publication of the US GDP data for the third quarter. While, the players, who kept yesterday short positions on dollar/franc and dollar/Canadian, should keep them. Keeping thus stop in "break-even". The players, being outside the market, should keep waiting position until Friday publication of gross domestic product. The further instructions read in tomorrow's comments.
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