USDCHF,USDCAD In condition of a celebratory subtlety dollar "bears" realized put-up...
18:45 11/24/2006

So, as well as it was supposed some players decided to take advantage of a celebratory subtlety of the market to dot "i's". We remind that yesterday in the USA there was a day off because of that the financial markets in the country were closed.

Let's notice that the fundamental picture developed excellently in favor of attack against "green" on all spectrum of forex.

 

So, purchases of single European currency received an additional impulse after the publication of an index of a business climate of German economic institute Ifo.

Let's remind that the index of a business climate of Germany grew in November, 2006 up to 106.8 points from 105.3 points in October at experts’ forecasts of 105.2 points.

Thus the index of current situation Ifo made 113.9 points in November against the revised 111.9 points in October at the forecast of 112.0 points. The index of expectations rose up to 100.1 points from 99.2 points in October at the forecast of 98.8 points. We also remind that data of survey are prepared on results of poll of 7.000 companies.

 

In opinion of economists, on a background of that delay of rates of growth of world economy has not yet influenced greatly on the European exporters, and drop in oil prices promoted strengthening of confidence of German businessmen.

 

These data increase probability of the next increase of ECB key rate. So, for example, right after yesterday's publication of Ifo index which was above forecasts, British bank Barclays Capital revised upwardly the forecast for ECB rate of refinancing up to 3.75 % by the end of the first quarter, 2007.

Let's remind that Barclays Capital previous forecast assumed value of the rate at a level of 3.50 % during 2007.

 

A euro rate was also supported by yesterday's statement of a member of ECB Governing Council Migel Anhel Fernandez Ordones that, even after increase of the interest rate, financial conditions of Eurozone promote economic rise.

Ordones, making comments on the developed situation, noticed: " Accessible information speaks about continuation of growth of production in the Eurozone the nearest quarters, though, probably, rates of growth will be below than in first half of current year".

 

Let's also notice that weak data on jobless claims in the USA and University of Michigan index preceded these events.

 

As a result we recommend to follow our last recommendations: to keep earlier opened sales of the dollar/Canadian rate, opened earlier at a level 1.1420. We remind that the nearest key purpose is at a mark 1.1270. And the next purpose should be considered already a level 1.1335.

And on dollar/franc, taking into account depth of falling, for opening of long-term sales of the pair it is necessary to wait for up correction of a rate. The pair has almost achieved the key purpose (1.2050) stated by us that is why the probability of recoil from these levels seems quite high.

 

 

 


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