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Forex · News · Forex Forecasts

NEWS / Forex Forecasts

EURUSD, GBPUSD. Dollar grew despite record decrease in investments into US economy.

09:27 11/17/2006

On results of the last trading session the dollar put on weight a little on euro and did not almost change on pound sterling. The dollar started to grow in the beginning of the Asian trading session, after that the confidence of the market that BOJ - the central bank of Japan is ready to lift rates a little hesitated for a while. The reason for this became muffled comments of its Head – Executive of Bank of Japan Toshikhimo Fukui on current monetary strategy of BOJ.

 

He confirmed that the Bank of Japan is ready to lift rates at any moment, proceeding from developing economic situation, however he emphasized that the Bank’s management does not have the certain strategy of carrying out of monetary policy firming and the schedule of the rate’s increase.

 

In opinion of the head of the Central Bank, decision-making on the monetary policy according to the schedule made in advance and with a binding to a particular calendar of events contradicts the common sense. "We do not connect directly the monetary policy of Bank of Japan with results of Christmas sales in the USA", - he added. "It is necessary to trace much".

 

With the beginning of the American trading session varied fundamental news over the USA caused opposite waves of sales and purchases of the dollar.

 

First of all, the disappointment was caused by TICS data, volumes of investments for September showed sharp decrease - almost twice in comparison with data for August and also were below predicted values.

 

Net foreign purchases in the USA in September made 53,7 billion dollars, that is 45 % less in comparison with the last month. Net foreign purchases in the USA for August were revised downwardly to 97,1 billion dollars from an initial estimation of 103,0 billion dollars.

 

The net volume of purchases of US long-term securities was equal to 53,2 billion dollars in September, that is 49 % less in comparison with August when it made, according to the refined data, 103,3 billion dollars instead of 105,7 billion dollars as it was informed earlier.

The net sales volume of Treasury Debt Instruments by foreign investors in September made 374 million dollars against net purchases in volume of 44,2 billion dollars in August.

The net sales volume of Treasury Debt Instruments by private foreign investors in September made 8,1 billion dollars, having reached the highest level since October, 2003. In August in this category there were observed net purchases in volume of 27,4 billion dollars.

 

Record drop in investments caused a wave of dollar sales against euro, however positive data on industrial production in the USA and week data on a labor market poised sales and by the end of trading session leveled dollar positions.

 

Industrial output of the USA was up 0,2 % in October, against falling of these parameters in September by 0,6 %, it is a little below expected growth, analysts expected growth of this parameter by 0,3 %.

 

 

Jobless claims for a week for November, 11th decreased 2000 up to 308 000, 4-week average value of initial claims for a week for November, 11th grew 2 000 up to 313750.

 

 

The dollar was supported after an issue of Philadelphia Fed index. Value of the index demonstrated hike up to 5,1 points in November against falling in October to 0,7 points.

 

Today the market expects key data on the market of the real estate in the USA, analysts expect that these data will put pressure upon the dollar. While we remain outside the market.

 

 

 

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