Yesterday the wave of euro and pound sterling sales against the dollar was caused by the publication of the report of Institute of Supply Management. Traders began to buy the dollar actively after ISM index demonstrated the value, which exceeded expectations of the market.

The index of activity in industry grew up to 54,7 in April, in comparison with April parameter of 50,9 and market’s expectations of 51,0. These are the highest rates of growth of this index for last three years.

Besides two significant subindexes, making composite ISM index showed record growth the last month - orders and employment, orders - up to 58,5 in April against 51,6 in March, and employment - up to 53,1 against 48,7 accordingly. Despite the proceeding of stagnation in the market of the real estate and the sector of the building industry connected with it the industry gradually starts to recover, and the industry of the first stage of a production cycle – processing -shows advancing rates of growth.

It affects favorably dollar positions, as makes chances of drop in federal funds rate at forthcoming FOMC meeting quite illusory.

On a background of a high rate of inflation which level was confirmed by ISM index (paid prices also demonstrated rise in April up to 73,0 points), FOMC will hardly decide to drop rate.

The report on the US employment will be the next significant event this week.

It is rather important market indicator having the supreme degree of importance A, according to 6-ball scale of the importance of financial news. It includes 4 basic components and the indicator of the labor market:

Average Workweek

Hourly Earnings

Nonfarm Payrolls - employment level, except for agriculture.

Unemployment Rate.

Nonfarm Payrolls and Unemployment Rate are especially important. The increase in the first and reduction of the last - support the dollar and on the contrary reduction of the first indicator and increase in the second - puts pressure upon the dollar.

Let's remind that the previous employment data demonstrated quite good results.

The positions opened on the eve are held according to our last recommendation, ISM index was issued above expectations, and therefore it was possible to open dollar positions. On the first target on pound sterling and on euro at 40 points there was fixed profit, on long-term positions stop is placed at 1,3605 on euro and 1,9975 on pound.