The future of euro and dollar exchange rate forecast

The exchange rate euro does not inspire confidence in investors

In brief: The exchange rate of major currencies depends on the European news, as well as new reports from the banks of the United States and Greece.

There passed another day without bad economic news. After the grand announcement of large-scale plan of salvation Greece movements in the market had eased, and by the end of the week and at all disappeared. It is only on hand the dollar, which strengthened against most of its rivals, even though not very positive data from the economic front.

Yesterday we learned that the March trade deficit in the U.S. increased the most in over a year ($ -40.4 billion), against the background of what the cost of imported oil has increased, and companies to replenish their stocks at the expense of goods purchased abroad. If you dig deeper, then this dynamic caused by the fact that the volume of imports exceed exports, ie consumption once again home again started to recover. Moreover, its role in this process was played by a gradual strengthening of the dollar against European currencies, which are now experiencing hard times due to the crisis in Greece. Another record, not very pleasant news is that the U.S. budget deficit reached $ 82.7 billion compared to $ 20.9 billion in April of 2009 and forecast $ 40 billion in fiscal balance recorded a U.S. in April for 19 th consecutive deficit, which is a record for the length of a segment of time. In addition, the April value of the deficit ($ 82.69 billion), almost 4-fold surpassed the same period of last April and was the highest for that month of the year. While such things do not attract the attention of markets, which are fully focused on the decay rate of the euro zone. However, published reports confirm that in the U.S. is not so smooth. Today’s calendar is not very saturated in terms of events. We are waiting for data on prices for imports and the number of requests for unemployment benefits. In addition to everything we once again waiting for a series of speeches of officials, among them Fed Chairman Bernanke. But do not think that we can hear something new. The market will likely continue to consolidate in anticipation of a major report on retail sales, scheduled for Friday.

Euro forecast

As we have said, the euro is very weak, so that even the fact that he does not fall, already makes him the honor. Incidentally, yesterday released economic data failed to impress. As shown by the data of GDP in the 1-meter reading, the euro zone economy grew slightly in the 1 st quarter after, she was at a standstill in the 4 th quarter of 2009. Eurostat reported that the E-16 GDP grew by 0.2% the quarter for the period from January to March, while annual growth of 0,5%. These data coincided with the projections and, of course, disappointed the market, as compared with U.S. growth rates of the euro area again loses. And that’s about the euro, as nothing new about the plan we have not heard, as scheduled for today from the official records do not even glance at that.

GBP forecast

Pound passed the position against the dollar, although only slightly. All again revolves around the theme of a new coalition of conservatives and liberal democrats. Nevertheless, the fact that the deputy prime minister appointed Nick Cleg, said that the work of the two parties may be more fruitful than we thought. Let’s see how they will be working on a plan to reduce the deficit – in the end, this is one of the most important points in the political program of the former candidates. Mervyn King yesterday called an agreement on cuts in government spending “a strong and significant. If we look at the economic picture, here we have not received the positive momentum that would like to see. In the first quarter of unemployment in Britain soared to 16-year high, underscoring the weakness of economic recovery. ILO unemployment rate increased by 53 thousand to 2.51 million Inflation Report showed that price growth will remain below the target level in the next two years. But the published data have confirmed this morning that April consumer confidence in Britain has been able to stabilize and even a little turn around after a large-scale collapse in March (maximum of almost 2 years ago), but it remained far from the February level. Now turning his gaze to the data on trade balance, which may be better than expected due to the prolonged weakening of the pound, which makes exports more competitive.

JPY forecast

Yen followed the example of most currencies and almost completely ceased fluctuations, even though a large number of reports published this morning. In March, the current account surplus in Japan increased by exports, suggesting that external demand remains a major factor supporting the restoration of the second-largest world economy. The surplus grew by 65.1% y / y before 2534000000000. yen and reached a maximum value in 2 years. In addition, it was reported that exports rose by a record 45% y / y, while imports – by 22%. This is very positive news for the economy, fully export-oriented and even neutralize not very positive data from the banking sector. The volume of bank lending in April, taking into account credit unions declined by 1,8% – as in the previous month, thus confirming the maximum rate of fall in 4 years. Overall, the decrease in annual terms for the fifth consecutive month. This trend confirms that companies are still reluctant to take a loan even in conditions to strengthen the economy and facilitated policy of the Central Bank.

Pavel Migin
2010-05-13 09:45, Currency news.

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