American answer to the euro

The dollar rose in price for a short time

Positive economic statistics yesterday allowed the US dollar to significantly rise in price against major world currencies and reach a two-month high. Even before noon, quotes on the international Forex market broke through the level of $1.34 per euro, whereas the day before they remained above the level of $1.35. The official dollar-ruble exchange rate rose by 8.19 kopecks. , up to 25.92 rub. The positive state of the labor market and the reduction in the trade deficit makes the market think about the likelihood of an increase in the discount rate in the United States. Analysts believe that the prospects for the dollar are improving against this background , but it is still premature to talk about a change in trend.

Yesterday, statistical data on the American labor market appeared, which confirmed its stable condition. In addition, the benchmark 10-year Treasury yield exceeded 5.25%, approaching its 2006 high. Against the backdrop of this positivity, the euro/dollar pair approached $1.3368 per euro, down from a three-week high of $1.3555 reached on Thursday. Following this, at the MICEX single trading session, the weighted average dollar exchange rate in “today” calculations increased by 9.65 kopecks. compared to the result of previous trading and amounted to 25.9422 rubles. for a dollar.

The Russian Central Bank set the official dollar exchange rate at 25.9247 rubles on June 9, 2007. per dollar, increasing it by 8.19 kopecks. The euro exchange rate decreased by 11.49 kopecks and amounted to 34.7780 rubles. per euro.

And by the evening, positive data on the trade deficit also came from America. As reported by the US Department of Commerce, the trade deficit in April 2007 fell to $58.5 billion, compared with the previous month's revised downward value of $62.39 billion. These figures were lower than analysts' forecasts, which could mean an improvement economic development in the second quarter. As a result, the dollar rose in price by 0.5% against the euro, to $1.3353 per euro

“After the European Central Bank raised the interest rate to 4% on Wednesday, the euro rushed up, but a correction followed on Friday,” notes Maxim Osadchiy, senior analyst at Antanta Capital. “Speculators stopped supporting the euro, since the rate increase was not unexpected for the market and was already taken into account in quotes in advance.” Russian Development Bank dealer Yuri Sedykh points out that market participants are now expecting a possible increase in the Fed interest rate. “These rumors have been floating around the market for a long time, but they have intensified recently,” he says. -- As recent statistical data have confirmed, the American labor market is stable, overall economic growth is faster, which means the monetary authorities have reserves for strengthening rates. "Investors expect inflationary pressures to set in soon." By the way, the head of the Federal Reserve Bank of Chicago, Michael Moscow, said yesterday that the American central bank still considers inflation to be the main risk for the US economy, but nevertheless, in his opinion, inflation expectations are currently restrained.

Against this background, the likelihood of tightening monetary policy is increasing, Mr. Sedykh continues. If at the beginning of the year everyone said that rates would most likely go down, now the situation has changed. “The prospects for the US dollar have become more favorable,” notes Alexey Trifonov, head of the analytical department of the Forex Club group of companies. "Investors' weakening appetite for risk has also reduced interest in interest rate spreads and put pressure on high-yielding currencies." According to specialist forecasts, the expected trading range for the next week for the euro/dollar pair is $1.328-$1.342 per euro.

Discussing the situation on the Russian foreign exchange market, Maxim Osadchiy notes that the dollar strengthened during the day by 0.3% against the ruble, which cannot be called a sharp increase. “However, this increase is only a manifestation of weak resistance to the natural process of strengthening the ruble,” he says. — The influx of petrodollars and foreign capital into our country continues. In the first five months of the year, more than $60 billion was received. As a result, the Central Bank is forced to buy more than half a billion dollars daily, saving the American currency from falling to a level corresponding to the so-called Big Mac index, that is, up to 15 rubles.”

Nikolay KOCHELYAGIN