Financial news

Dollar is traded under the pressure. Foreign exchange market review. 24 September 2007

At Ukrainian interbank foreign currency market on Monday after closing of bid at high marks about 5,015/5,025 hryvna strengthened itself against US dollar, having come maximally close to the lower range of the "corridor" within which limits Central Bank is keeping US dollar for more than three years.

After session opening US dollar for some time have been traded in the range 5,015/5,025, but soon the rate started to decrease, first having reached the mark 5,013/5,017, then 5,007/5,011, and by the end of the session it decreased at all by 5,0005/5,0070. On Friday the rate by the end of bid made up 5,010/5,025.

Most part of bargains today was concluded by market participants in the range 5,014/5,017, while 5,015/5,020 per $1 a day before.

NBU did not participate in bid.

At DEPO-market today the rates on credits in hryvna go on lowering down.

Trade range on hryvna "overnight" decreased by 0,30/1,00, from 0,5/1,25 on previous day. Average weighted "overnight" by 16:00 КТ remains unchangeable at the level 0,9%, but by the end of bid can be decreased by 0,8%. Concluded bargains bulk by this very time made up UAH 0,845 bln., while UAH 1,182 bln. on Friday.

The cost of "weekly" resources is in the range 1,0/2,0%, while 1,9/4,00% a day before. As a result average price on the performed transactions decreased by 1,9%, from 2,6% according to bid results of previous day. Bid bulk made up about UAH 177 mln., while UAH 165 mln ., fixed a day before.

The cost of credits for the term "from 22 up to 31 day" is in the range 4,5/9,0, against 6,2/7,0% on previous day. Average cost decreased on 0,1%, by 6,4%.

At international foreign exchange market US dollar is traded under the pressure as currency is still negatively effected by FRS interest rate decrease last week. As we already noted, in a short-term prospect US dollar weakening, most probably, will be continued. The next important target is the level 1,4570, which equals US dollar rate, against German mark in the beginning of 1995.At European session euro/dollar set a next historical maximum at the level 1,4130.

Last few weeks euro breaks one record after another against US dollar. By this time the rate was a little corrected and is about 1,4095/05. The descending movement is restricted by line of purchases at the level 1,4080. Also dealers inform about interest to sales connected with option barriers in the field 1,4150. Oppression to ascending movement is located at the level 1,4142. Despite the next week US dollar started in the outskirts against euro and pound, some dealers consider that the impulse became weaker as markets start to take into account in prices possible rates decreases from the side of the Bank of England and ECB at the beginning of the next year. Nevertheless, data, published on this week, would hardly provide some support to US dollar: it is expected that house sale indexes (Tuesday, Thursday) will appear to be not very comforting, the same concerns also to the orders for long-term use goods (Wednesday) and RSE deflator (Friday). All this, probably, would go on keeping US dollar within descending trend.

Market participants forecast achievement by euro of levels above 1,42, against US dollar on this week, conditioning this by potential negative data on housing market in the USA, increasing chances for further weakening from the side of FRS.

During the day the pair was traded in the range 1,4081/1,4130.

Comments of Svitlana KRAMAROVA, Head of Treasury of PRAVEX-BANK.