The overpriced rates of national currencies influence negatively on manufacturers of these countries, Japanese and European goods lose at world markets due to hike in per unit costs in comparison with the same American goods.
Last month European Commission decreased estimation of economical growth in Eurozone for 2008 by 1,8% to 2,2%. Today ECB representative Jean-Clod Junker stated that high oil prices and shocks at financial markets are the risks for economy. Eurozone economy does not need such stimulation as the USA.
It is necessary to add that according to the repeated preliminary data rates of economical rise of Eurozone slowed down in the fourth quarter concerning the third one. GDP for a quarter remained without changes +0,4% q|q, annual indicator dipped to 2,2% from 2,3%. Data for the third quarter were revised downwards to +0,7% q\q +2,6% y\y from +0,8% q\q +2,7% y\y. Household consumption for a month almost did not change, showing decrease by 0,1%, investments grew by 0,8%, export was up 0.5%. Import was down 0,4%.
Dollar was supported by ISM index a little bit. Despite the basic ISM index in a manufacturing industry showed the greatest dip for the last 5 years February ISM index did not show such a strong decrease as it was expected by the market.
As a result after testing a new historical top on euro/dollar pair on Tuesday quotations on this pair returned into the ranges of currency corridor, limited by 1,5240 - 1,5140.
One of the main events for the market this week is the decision of ECB and Bank of England about the basic interest rate, which publications are tomorrow, March, 6 at 15-00 ? 15-45 Moscow time.
The experts' opinion about the prospect of ECB rate decrease is that ECB will leave the rate at the former level, 4%.
Economists say that they will watch closely the press-conference of ECB, whether it will differ from the last forecasts. According to the preliminary data inflation in Eurozone will remain at historical top, 3,2% in February due to rise in food and fuel prices.
As a whole market's mood is still the same - against dollar, though dollar bear heat cooled down a little after dollar falling during the last two weeks. Today market expects decision about ECB rate, if something incredible happens and ECB lowers the rate from 4% by 25 basic points (minimal correction step) there is a good opportunity to speculate for dollar rise vs. euro.
