Financial news

US dollar increas against all European currencies

International foreign exchange market. On Thursday US dollar increased against all European currencies.

In the morning from Great Britain there were data on retail sales for February. Sales increased unexpectedly on 1% in comparison with January and on 5,5% in annual calculation. Such data show that crisis at credit market almost did not touch Great Britain, that is why Bank of England can remain key interest rate without changes.

Number of appeals for unemployment benefit in the USA increased by 378 000. Forecast was — 360 000. However such unpleasant news could not change increasing US dollar. Such movement of dollar is connected with profit fixation by many market participants.

Market of shares in the USA was opened by growth. Index of leading economic indicators in the USA decreased 0,3% in comparison with previous month. Such meaning coincided with analysts' and traders' expectations.

There is high probability that US dollar keeps decreasing against main decreasing macroeconomic indicators.

Current technical levels on the main currency pairs:

At Ukrainian interbank foreign exchange market dollar offer keeps dominating against demand that caused its rate decrease by the level 4,960/4,985 per $1 — minimal levels since December 2006. And it is necessary to note that majority of bids was performed today lower than psychologically important level in 5,00/$1, that is retaining while US dollar decrease against UAH, as NBU renews currency interventions while positive achieving of this mark by national currency. There can be several reasons making banks to sale currency lower than 5,00/$1, among them — necessity to get quick hryvnia and nonintervention of NBU into bids during two previous days, when US dollar quotations briefly decreased lower than 5,00/$1, that even today could cause doubts of bids participants in renewal of currency intervention by NBU. And these doubts turned out to be reasonable, as NBU even today did not go to market for buying surplus of dollar with 5,00 rate, as it was done before. It can be connected with several reasons:

1 — the market is balanced individually, and there remains insignificant quantity of unsecured applications to perform intervention;

2 — NBU is slowly preparing market to future liberalization, gradually extending US dollar exchange fluctuations range, as it did so in winter, allowing UAH fall down to 5,075/$1;

3 — NBU interventions filling the market with additional liquidity run counter to current NBU policy as regards excessive liquidity binding for containing inflationary processes in the country.

During the session, US dollar exchange rate fluctuated in the range of 4,960/5,005, with 4,99/5,01 a day earlier, with the majority of market participants having concluded deals in the range of 4,985/5,000, with 5,000/5,005 per $1 a day earlier.

At DEPO-market, interest rates decrease on credits in national currency is growing very fast against the background of gradually increasing balances of banking correspondent accounts.

Thus, overnight rates by the end of the day decreased to 10,0/15,0% from 14,0/20,0% in the morning and from 15,0/20,5% the day before. Average weighted price on concluded transactions fell more 0,4 % and constituted by 17:00 KT 17,0 % of annuals. Concluded transactions volume constituted UAH 2,81 b, with 3,87 b a day earlier.

Rates on credits for the period "from 2 to 7 days" are decreasing very fast today: their range was marked within 14,0/22,0%, with 16,0/23,0% on previous business day. Average weighted price fell 16,7 % with 18,6 % according to trade results on Wednesday.

Rates on credits for the period "from 22 to 31 days" fluctuate today within the range of 21/22,2%, with 22,0/23,0% the day before.

Comments by C.N. KRAMAROVA, Head of Treasury, PRAVEX-BANK. 

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