The rise in price of the European currency turned out to be short-lived

The value of the European currency yesterday increased on the international market to its highest since the fall of 2011 - $1.3584/euro. On the Ukrainian market, the euro exchange rate also reached another peak on the interbank market - UAH 11.05. However, after negative news from Europe, the dollar went up again.

The rise in price of the euro on the Ukrainian interbank foreign exchange market, which was observed throughout January, continued yesterday against the background of the depreciation of the dollar on the world market. Yesterday, the euro exchange rate against the dollar rose to its highest level since November 2011 - $1.3584/euro. This was facilitated by the encouraging results of the US Federal Reserve System (FRS) meeting that ended the day before. Due to the persistence of risks in the country's economy, the regulator confirmed the volume of repurchase of government bonds and mortgage securities at the level of $85 billion monthly. The Fed also announced that it would maintain the target interest rate range for federal lending funds at 0-0.25% per annum.

According to the currency "indicator", yesterday the value of the euro on the interbank market in Ukraine reached its maximum in more than a year - UAH 11,033-11,052. The last time such a high price of the European currency was recorded was November 8, 2011. The cash market immediately responded to this by increasing the exchange rate by an average of 5-6 kopecks. The most expensive European currency was sold by Credit Dnepr Bank - at 11.2 UAH. In general, since the beginning of January, the euro on the interbank market has strengthened against the hryvnia by 3.88%, from the level of 10.62-10.65 UAH/euro. This strengthened the price competitiveness of Ukrainian products on the European market, since for EU consumers they fell in price by almost 4%.

At the same time, the value of the dollar on the non-cash market continues to remain uncharacteristically stable. Since January 11, the American currency has risen in price by only 0.1 kopecks. Yesterday the dollar was trading within the range of UAH 8.142-8.145. On the cash market, the average dollar buy/sell quotes were UAH 8.12/8.15.

However, the strengthening of the European currency against the dollar ended with the start of negative news in Europe. Germany's Federal Statistical Office announced a 1.7% decline in retail sales in December, the biggest drop since May 2011. Analysts surveyed by Bloomberg on average predicted a 0.1% decline in sales. In addition, November sales data were revised, which increased by 0.6%, and not by 1.2%, as previously estimated. In annual terms, retail sales fell 4.7% last month, the worst result since February 2009, while experts had expected a decline of 1.5%. "We've seen weak retail sales data in Germany and that has weighed on the euro," ING currency strategist Chris Turner told Reuters. In such conditions, the European currency exchange rate dropped to $1.3581/euro by the evening.

The negative information background in Europe was also supported by the reporting of the largest German bank. Deutsche Bank's net profit at the end of 2012 amounted to only 700 million euros, which is six times less than the result of 2011 (4.3 billion euros). The main reason for the fall was the losses incurred by the bank at the end of the year: over the past three months, the institution lost 2.2 billion euros. Such weak quarterly results from Deutsche Bank - the maximum quarterly loss in the last four years - came as a complete surprise to analysts, who, according to the consensus forecast, expected losses eight times smaller, writes Bloomberg. This will not affect the bank's plans on the Ukrainian market. “Deutsche Bank does not intend to leave the Ukrainian market. Ukraine is an important market for us, and Deutsche Bank is successful here,” Tim Oliver Ambrosius from the press service of the bank’s German office told Kommersant.

Elena Gubar, Vitaly Gaidaev

The euro bounced back against the dollar