In the end of the last week the dollar again strengthened on weak news over the European Union on morning European session. However during last American trading session traders were disappointed by weak parameters on the US economy. Last circumstance also caused correction of a short-term trend on dollar towards euro strengthening.

On results of the second quarter the American economy showed quite good results in comparison with 1 quarter of current year when the GDP gain demonstrated the weakest data, only 0,6 % a year. That was the lowest indicator of GDP growth for last four years, not counting negative dynamics of gross domestic product in 1 quarter 2006.

In the second quarter the US GDP was up 3,4 %, according to official data of Department of Commerce of the USA. It is a little above a value predicted by Wall Street analysts - experts of the stock exchange markets assumed GDP growth by 3,2 %.

However weakness of the consumer market gave traders’ doubts in the long term development of economy of the USA in the third quarter of this year. According to data of Department of Commerce consumer expenses were reduced essentially, rise in this indicator made only 1,3 % in the second quarter, in comparison with the first quarter of 3,7 %.

Besides the market of the real estate goes on falling according to the same source, residential  construction showed drop by 9,3 % in comparison with the similar period of the last year.

In Michael Gregory’s opinion, BMO Nesbitt economist, the fact that stagnation to which the sector of the building industry and the real estate in economy of the USA were subjected to, gradually gets into the field of where the economy showed quite good results. These are spheres of the consumer market and labour market, interconnected with it. The next two months as Michael Gregory considers the economy will face the increased risks connected with consumer potential of Americans.

Traders also paid attention to essential reduction in preliminary value of inflationary indicator on results of the second quarter 2007 - Chain Deflator. The inflationary index demonstrated greater drop than market analysts expected, up to 2,7 %, in comparison with a parameter of the first quarter of 4,2 %, analysts predicted falling inflationary index to 3,4 %.

It is the strong factor that FRS will adhere to further equilibrium policy and keep the rate at a level of 5,25 % till the end of year. And it also raises chances that FRS can reduce the interest rate if inflationary risks start to decrease.

That reduces number of dollar bull players and puts pressure upon dollar positions against the basic world currencies.

Data of University of Michigan consumer sentiment only confirmed data about decrease in consumer potential of the American home market, than supported dollar bears.

Consumer moods according to this source dipped to 90,4 in July against 92,4.

Yesterday eurodollar quotations drifted smoothly upwards, moved by Friday moods of the market, on a background of absence of especially significant news both over EU and the USA.

Today there is expected a day rich in economic news, therefore in the market strong movements are possible.

Among significant news over the USA it is possible to note Chicago PMI, this index forestalls the basic industrial indicator - Association of Purchasing managers’ index. And also the index of employment on results of the second quarter. The market expects drop in values of industrial index - so quite probably dollar falling will proceed, if analysts’ forecast proves to be true tomorrow.