Financial news

Foreign exchange market review. 04 September 2007

At Ukrainian interbank foreign exchange market after normal market work was renewed after week-end in the USA on Monday, the situation changed cardinally: US dollar strengthening, which was taking place during a few sessions, had been changed today by decrease of its rate against hryvna. Clients' demand in foreign currency sale during week-end, probably, grew more than a demand in its purchase that provoked some pressure at American currency rate which decreased by session completion by 5,005/5,018, from 5,015/5,035 at the bid opening. On previous day the quotations were fluctuating in the range 5,020/5,045.

Main bulk of bargains was concluded today in the range 5,020/5,027, against 5,025/5,035 at Friday bid.

At  DEPOT-market today  there is no meaningful change after yesterday interest rates decrease.

"Overnight" cost during the day is fluctuating in the range 0,5/1,5% annuals, and as a result average weighted rate by 16:00 КТ makes up 0,9% annuals that completely corresponds to the level of closing of Monday bid. Concluded bargains bulk by 16:00 КТ made up UAH 591 mln. against 711 mln. according to the results on Tuesday.

"Weekly" resources cost is fluctuating today in narrow range about 1,5/2,5%, in comparison with 1,0/4,0% on previous bid. Average cost of issued credits makes up 2,3%, that is higher than analogues index on previous day on 0,3%. Bid bulk made up by 16:00 КТ 23 mln., while 216 mln. a day before.

Credit cost for the term "from 22 up to 31 day" was fluctuating today in the range 5,0/5,5, while 2,9/6,5% on Monday.

The cost of "overnight" credits in US dollars is fluctuating today in the range 5,5/6,5%, in euro — 4,15/4,75%.

At the international foreign exchange market US dollar was traded at Asian session in narrow ranges in the absence of definite movement direction due to week-end in USA on Monday. Dollar/yen was traded unstably in narrow range below 116,00, having spent most of the time in the range between 115,71 and 115,99. At the beginning of session the pair weakened in unison with the rest foreign currencies pairs with yen, against background of sales from the side of Japan exporters and speculative accounts. But, later Japan currency was influenced by fears that Japan banks are subject to the problems of substandard crediting in USA, and the pair dollar/yen strengthened significantly. Euro/dollar at Asian session had not managed to go out of the range frames 1,3605/25. Expecting that ECB will remain the rate unchangeable at the meeting later on this week prevents this pair to overcome the mark 1,3650. Waiting for decisions of central banks on the rates makes some nervousness to the market and as a result investors again have to refuse from risks and to cut «carry trade» positions.

All these factors resulted in yen growth in pairs with the main currencies and euro and pound fall against yen found its reflection at their crosses with American currency. European currency decrease was not stopped even by positive data about Internal Produce of Eurozone for 2 quarter which coincided with forecast and data about producers prices in Eurozone in July which grew up more than analysts expected. Euro/dollar overcame today the opposition in the field of figure 1,3600, but came across sales in the field 1,3590/80. After a small rollback the pair overcame the indicated level and was stopped by sales at 1,3660/50. At this time the pair is consolidated in the field 1,3570/80. During the day euro/dollar was traded in the range 1,3550/1,3627, dollar/yen — 115,31/116,0, euro/yen — 156,51/158,01, dollar/pound — 2,0072/2,0195.

Cash market of Tuesday was characterized by sweeping US dollar rate growth in all regions of the country and the most intensive in eastern regions.

In Kyiv US dollar rate grew up by 5,04/5,045, against Monday 5,029/5,035. Trading with cash dollar in southeastern regions was performed at positions 5,05/5,055; in northeastern regions foreign currency was traded 5,04/5,045. In the west American currency remained at the level 5,03/5,035.

Cash euro market had preconditions for decrease like on Monday. In the capital euro rate decreased by 6,85/6,86, against previous business day 6,86/6,87. In the west of the country common European currency rate was traded 6,82/6,84. In the east cash euro rate was corrected in the range 6,855/6,87.