Financial news

US dollar began to increase versus European currencies

International money market. Today US dollar was slowly growing.  But with trading areas opening in Europe, this growth gave way to decrease versus pound sterling and Swiss franc. No important fundamental news were published in European countries, nor in Great Britain.

The market expected information on US economy. Two news were published at once at 14:30 KT. US GDP in fourth quarter 2007 rose 0,6 per cent versus equivalent period of the last year. Number of unemployment benefit applications decreased to 366 000 per week in the USA. Due to these positive news, US dollar began to rise versus all European currencies.

Technical analysis of time diagrams shows that dollar in short term perspective keeps strengthening its positions.

Current technical levels on principal currency pairs:

At Ukrainian interbank foreign exchange market, US dollar strengthened firmly its positions within the range of  4,98/5,010, in which it was on the previous day. Currency offer on behalf of bank's customers is increasing by means of banks offering their own currency acquired via exchange offices from population at low exchange rates (dollar buying rate in banking exchange offices fluctuates within the limits of 4,70-4,90). This creates additional pressure on US currency exchange rate and does not give it the opportunity to overcome steadily 5,00/$1 mark. Only during 0,5-1,0 hour from session beginning dollar rate was within the range of 5,00/5,01, and soon it decreased below psychological 5,00/$1 mark and by session closure was traded within the limits of 4,985/5,00.

The majority of deals were concluded today by market participants within the same range than it was done a day earlier — 4,99/5,00 per $1.

At DEPO-market, differently oriented movement is observed when defining interbank credits value for different periods. This is explained by market saturation by UAH resources and reporting date approaching.

"Overnight" credits keep falling in price, having reached by the day closure 3,0/5,0% level, with 6,0/8,0% in the morning. Average weighted price of concluded transactions by the day closure constituted  6,2%, with 7,0% according to Thursday session results. Concluded transactions volume by this time constituted UAH 2,90 b, with UAH 3,42 b according to day results on Wednesday.

With that, credits for a period "from 2 to 7 days" keep increasing in price, while bids moved towards the area of 13,0/17,0%, from 9,0/16,7% the day before. In the final analysis, this allowed average weighted price to increase up to the level of  14,0%, from 10,5% the day before.

Rates on credits for a period "from 22 to 31 day" fluctuate today within the range of 15,0/19,0%.

To counterbalance "overnight" rates decrease on UAH credits, currency credits have the call which contributes to their price for resources sellers. Thus, dollar credits value constitutes 5,0/7,0% p.a., Euro credits value — 4,25/5,5%.

Comments by S.N. KRAMAROVA, Head of Treasury

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