This week the dollar continues to dip, having received a powerful negative impulse. We remind that last week the American investors were shocked twice by record-breaking low indicators on the real estate and on the labor market.
On Wednesday dollar falling in the beginning of the American session a=caused unexpectedly strong reduction in the index of pending home sales in the USA. Within two hours since the beginning of the publication of this negative news on the market of the real estate the dollar lost almost 100 points or about 1 % against euro that is quite strong movement of quotations during one trading session.
Pending Home Sales index of National Association Realtors of the USA, including volumes of pending sales of condominiums and cooperative houses reduced in July to 12,2 interests to 89,9 points. Whereas in June value of this index were up 5 percents to 102,4 points. It is the worst parameter of the index for last six years, in September, 2001 the index showed value of 89,8 points.
And finally the dollar was thrown on Friday after the publication of the report on the labor market of the USA. The dollar falling was provoked by unexpectedly negative news on these data. The sensation was caused by that for the first time for last four years, number of payrolls in the US economy for a month was not increased but decreased!
According to analytical bureau of Department of Labor nonfarm payrolls dipped by 4.000 in August, 2007 in comparison with the growth revised downwardly by 62.000 a month earlier. Analysts predicted growth by 110.000.
As a result forex traders continue to cast dollars during two days of current week. Euro\dollar quotations again have approached the top historical level, to the price of 1,386 dollars for euro.
Among significant news today there is the trade balance report of the US Department for July. Trade deficit was narrowed a little, that is the positive factor for dollar, however these data did not impress traders.
Trade deficit was narrowed to 59,2 billion dollars in July, against 59,4 billion in June. Owing to much weakened dollar export from the USA grows at faster rates, it increased by 2,7 percents in comparison with data for the last month and by 11,3 percents compared with similar parameters of the last year.
The market concentrates its attention on FOMC meeting, co which takes place next week, on September, 18th and where the decision on the basic rate of the Federal Reserve of the USA will be made.
In general, the market makes up its mind that FRS rates will be reduced, there are left less doubts about it. If this time FRS makes this step the differential of FRS and ECB rates again will be reduced that will inevitably affect a dollar exchange rate which by the end of year can reach a level of 1,4 dollars for euro.
On the open positions: stop on euro is placed at 1,3770, in fixed profit, and the pound sterling is kept in break-even.
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