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The dollar experienced a rapid decline last week

The dollar to euro exchange rate last Friday crossed the psychological limit of 1.3 dollars per euro - the fall stopped at 1.31 (last Thursday at the end of trading in New York the euro was 1.29 dollars). The last time the US currency was so cheap on the world market was in March last year. Its exchange rate also fell in Russia - to 26.4 rubles. per dollar - this is the level the dollar was in the second half of November 1999. The Russian Central Bank set the dollar exchange rate at 26.51 rubles, lowering it by 4 kopecks. Analysts attribute the dollar's decline to the positive outlook for the euro, driven by statistics from Europe, and negative news about the US economy that has been pouring in all week. The dollar was also unlucky because many traders did not participate in trading on Friday (America celebrated Thanksgiving Day) and the volume of transactions was low.

At the beginning of last week, he supported the European currency and, accordingly, weakened the American head of the ECB, Jean-Claude Trichet, who announced the threat of rising inflation, notes Alexey Trifonov, head of the analytical department of the Forex Club group of companies. In this regard, market participants began to think about a possible increase in the discount rate by the European Central Bank. In addition, the German consumer price index rose by 1.5% per annum in November after rising by 1.1% in October.

The position of the dollar was also shaken by the US government, worsening the forecast for economic growth and consumer price growth for 2006. “The data on the number of applications for unemployment benefits in the US, published on Wednesday, could not support the dollar,” says Mr. Trifonov. -- For the week ending November 18, the number of applications increased by 12 thousand and reached 321 thousand, indicating a slight deterioration in the situation on the labor market in the United States. It was expected that the number of applications would increase by only 2 thousand.” The bulls were also not pleased with the consumer confidence index from the University of Michigan, USA, which decreased from 92.3 to 92.1 points, despite the fact that the forecast value was 93.3 points. Also on Friday, People's Bank of China Deputy Governor Wu Xiaolin warned other Asian central banks of "inflation risks" threatening dollar-denominated foreign exchange reserves.

According to analysts, the weakening of the American currency will continue, since its main competitors are now at their highest positions over the past few months. “Even taking into account a possible rollback from extreme values, the main currency pairs have already moved into a new range, from which the American currency is more likely to move down,” says Mr. Trifonov.

In the coming week, economic data will mainly be published for the United States, and not for Europe. According to forecasts, a number of important US indicators, in particular the volume of orders for durable goods and data on the housing market, may worsen. However, analysts expect favorable data on GDP growth, which will be released on November 29, consumer confidence (November 28) and the ISM industrial index.

Nikolay KOCHELYAGIN