Financial news

High demand on US dollar. Foreign exchange market review. 3 October, 2007

At Ukrainian interbank foreign exchange market on Wednesday situation practically did not change, high demand on US dollar continues keeping US dollar rate in upper part of «customary trade range».

Bids were opened at the mark 5,035/5,050, but rate grew quite quick by 5,047/5,055, and at the end of the session grew higher and kept to the closure of the day on the mark 5,05/5,06 per $1, at 5,050/5,057 a day before.

Majority of bargains was concluded today by market participants at the range 5,047/5,055, at 5,040/5,045 for $1 on bids on Tuesday. NBU remained neutral relating to bids course.

At DEPO-market situation remains the same. Quickly increasing balances on correspondent accounts in NBU, which reached today UAH 23,086 bln., exclude possibility of stabilization of current situation in nearest days which is characterized by low rates on interbank credits and insignificant volumes of operations.  

Trade range on hryvna «overnight» today consists about 0,2/1,5%. Average weighted rate «overnight» by 16:00 КТ constituted 1,1%, against 0,8% in accordance with the results of previous day. Volume of concluded bargains by this time constituted just UAH 262 mln., at 721 mln. on bids on Tuesday.

Cost of «weekly» resources today is within 1,0/2,2%, at 0,75/3,4% a day before. Average price on conducted bargains increased insignificantly by 1,6 from 1,3% a day before. Volume of bids lowered by 50 mln., from 118 mln. a day before.

Credits cost for the term «from 22 to 31 day» varies in range 4/5%, that is a little bit lower than yesterday meaning 5,0/6,4%.

At international foreign exchange market Euro decreased in field 1,4160 against US dollar after emergence of comments of Romano Prodi, Prime-Minister of Italy, that he is worried by euro exchange rate and that he discussed this problem in details with Angela Merkel, chancellor of Germany. Thus, Prodi enlarged quickly growing list of European politicians and representatives of financial authorities which are discontented of Euro strengthening.

However Euro was able to recover today and reach intraday minimum on 1,4201 after publication of data about scheduled discharge in the USA in September. In spite of this index shortening on 9,7% by 71,739 people, it is expected that slowdown in housing sector will continue for some time to cause working places shortening.

Ascending movement of pair was suspended by sales in the range 1,4190/00, where feet are located. Also at 1,4200/20 sales on the hand of sovereign accounts.  

Insignificant correction euro/dollar, started after unsuccessful test of field 1,42, maintained by data about working places growth in the USA in September on 58,000, that coincided with analysts' forecast and data of ISM index, reflecting activity growth in nonproduction sector of the USA which in September decreased by 54,8 points and turned out better than analysts' forecasts in 54,5 items, lead pair to new intraday minimums on the mark 1,4139. Further decrease of pair is complicated by purchases located in area 1,4150/40 and 1,4135/25.

At the moment pair is being traded about 1,4140/50.

On Thursday market is expecting results of ECB and press-conference of Head Jean Claude Trishe. On Thursday also is expected decision on key rate from Bank of England.

Comments of KRAMAROVA S.N., Head of Treasury of PRAVEX-BANK.