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Forex · News · Forex ForecastsNEWS / Forex Forecasts |
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EURUSD, GDPUSD. Dollar strengthened a little after weak data over Great Britain.
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16:36 04/27/2007
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Yesterday the dollar positions strengthened a little. However the reason were not positive releases over the US economy, but weak data over Great Britain. Economical releases over the UK influenced on the pound quotations as well as euro quotations.
To greater degree it concerns the UK GDP data for the 1 quarter and forecast of consumer prices for April.
Despite data over the countries of EU were positive traders focused their attention on English economical news.
The euro was sold despite the Minister of Finance of Germany Peer Shctinbruk gave the optimistic estimation of German economy. "German economy grows firmly, which drivers are internal and external factors", - is said in Shctinbruk speech. "We are going to repeat it in 2007. Current budget suppose that the volume of net holdings will make about 19.6 bln. euros", - he added.
Rise in employment and favorable influence of this factor to private consumption "foretell growth of home demand in the nearest months. The only way, with the help of which we can make the budget agree with the norms of our constitution, is to keep the policy of consolidation of budget, especially when economy is in a good condition", - the Minister of Finance of Germany noted.
On results of the first quarter of 2007 GDP gain in Great Britain was the same - 0.7%, however in comparison with the last years values showed drop of rates by 0.2% to 2.8% - in comparison with the same period of last year.
Consumer price index in Britain dipped this year, though is above the target level of Bank of England. YouGov agency together with Citigroup published the report according to which average expectations of index of consumer prices the next 12 months will make 2.5% in April, at the same level as in March, while in January they were 2.7%. the survey was made between 18 and 24 of April after the official data last week reflected CPI rise up to 3.1% in March. CPI exceeds by more than 1% the target level of Bank of England of 2%.
These two circumstances can affect the Bank of England decision on rates and leave the interest rates of Central Bank at the same level of 5.25% that caused a signal for traders of pound sales against the dollar.
The dollar was supported by decision of Bank of Japan on rate. The member of BOJ Board voted unanimously for perseverance of interest rate without changes as after increase of interest rates in February the economical situation did not improve so that to continue rates rising. BOJ left the rate at a level of 0.50%. BOJ decision was expected. Many market players said that it would be difficult for Bank of Japan to increase the rate taking into account drop in consumer prices, possible political pressure before the elections to the Upper Chamber of Japanese Parliament, which will take place in July and also uncertain prospects of the US economy.
The government informed earlier that CPI dipped by 0.3% in March, having shown decrease the second month in a row and it was the greatest drop for last 2 years. Markets wait for statement of BOJ Head Toshikhito Fukui and the forecast of Bank of Japan. In the report there will be forecasts of GDP rise and price changes. Interest rates was raised at February meeting up to 0.5%: from 0.25%.
The Bank of Japan Board still consider that slowdown of rise of the US economy is a great danger for Japan.
Let's remind that today it is expected the GDP report of Department of Commerce in the 1 quarter of 2007.
However, the main event which the market will expect, is FOMC decision concerning rates, FOMC meeting will be held on May,9. While remain off the market.
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