Financial news

Foreign exchange market review. 16 August 2007

At international foreign exchange market the main factor of today bid remains the closing of speculative positions on carry trade, mainly in pair with yen, which recommenced after the next decrease of Europe shares markets, following after fund indexes in Asia and the USA. Decrease of different currencies to yen was reinforced due to actuation of stop-losses and overcoming of option barriers. By 16.40 KT dollar cost 114,52 of yen against 116,47 of yen in the USA. During bid it decreased for a short time to 113,58 of yen, the lowest level in this year. Afterwards American currency partially recovered, but stayed to be bid lower than psychologically important level of 115,00 of yen. One Euro cost 153,75 of yen against 156,47 of yen the day before. During session it decreased to 151,92 of yen. Euro/dollar pair is bid at the level $1,3427 against $1,3425 in the USA, having recovered after decrease to $1,3358 earlier today. Euro/dollar recovery was promoted by purchases, provoked by achievement of the pair of new minimums and also a stream of economic data from the USA. The number of applications on unemployment in the USA for the last week increased by 322.000 against 316.000 during previous week and of forecast of decrease by 313.000. Number of houses in the USA in July was decreased on 6,1% by 1,381 mln. pieces after growth on 2,1% by 1,470 mln. pieces in June.

Euro/dollar today during the day was bid within the range of 1,3358/1,3447, pound/dollar — 1,9770/1,9889, Euro/yen — 151,92/156,52, dollar/yen — 113,58/116,73.

In Ukrainian interbank foreign exchange market on Thursday National Bank after a week break recommenced a purchase of currency unclaimed by market at the cost of 5,00/$1.

All the week interbank market felt a slight overbalance of currency offer which while accumulation finally resulted in misbalance that quite significantly became apparent already at bid on Wednesday, but yesterday NBU did not come to the market with interventions. This resulted in decrease of today dollar quotations by 4,99/5,00 per $1 while 4,995/5,005 at the opening of session.

The main part of dealerships was concluded today in the range of 4,995/5,000 in comparison with Wednesday when rate dominated close to 5,00 per $1. Uncertainty of market participants in performance of NBU interventions and necessity of fast settlement with clients made market participants to conclude dealerships on quotation lower 5,00.

But National Bank stayed true to its promise to support stable UAH quotation and at the end of session came with dollar purchase on unchangeable during two years quotation 5,00/$1.

while 5,0010/5,0030 on previous day. Earlier representatives of National Bank claimed that NBU will participate in bid only in case of substantial misbalance at market and, obviously, present offer advantage was not so much substantial for National bank to recommence a purchase. On the other side, unwillingness of central bank to interfere today in bid procedure can lead to attempts of market participants to decrease the quotation of dollar to hrivna considerably lower than the mark 5,00/$1 already at tomorrow bid.

Depot-market today has not suffered considerable changes except short-term credits cost increase.

"Overnight" hrivna credits cost remains in the range of 0,3/1,0%. Average cost of concluded dealerships after yesterday decrease according to results of the day on  0,1% remains unchangeable and makes up 0,6% annuals. The volume of concluded dealerships by 16-00КТ made up just UAH 562 mln. against UAH 939 mln. according to Wednesday bid results.

The cost of "weekly" resources has again increased and today is in the range of 2,5/4,0% while 1,4/3,0% at previous session. Average cost of issued credits increased by 3,0% against 2,1%. Bid volume made up by 16-00КТ 65,8 mln. while   142 mln. on Wednesday.

Dealerships for the term "from 22 to 31 day" were concluded by market participants in the range of 5,7/8,0% in comparison with 5,0/7,0% a day before.