February 19th, 2010
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macroeconomic data released last Friday, and opening the beginning of the week again were relatively unfavorable for quotations euro character.
Index of the dynamics of new industrial orders in the euro area in November 2009 was -1.5% (g /g) against the expected market increase of the index by 3%. Previous value of this indicator has been revised with a slight increase, up to -14.4% compared to -14,5%.
Today”s statistics calculated February GfK consumer confidence index in Germany has demonstrated reduction of this index to a mark of 3.2 Fri, lowest since last September. The data, however, corresponded to the median estimate.
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Released in last Thursday”s information on the Administration of the planned U.S. legislation limiting investment banking, in particular, preventing them from investing in hedge funds, has caused a new round of investment outflows from the segment of risky investments. A similar reaction when evidence of the beginning of the process of tightening monetary policy of the Chinese authorities. These factors also traditionally apparently, have recently supported the U.S. currency on the FX.
Nevertheless, the rate of EUR /USD, seems still quite steadily quoted above designated them last week support level 1.4030. Probably, the market expects more concrete results of the confrontation of financial and political leadership of the United States and the banking lobby, which, in particular, will showcase the results of this week awaiting a vote in the U.S. Senate on the appointment of B. Bernanke for a second term.
It should be noted that at the moment, according to estimates published in the media, the probability of re-election of incumbent Fed is more than 90%. However, it is obvious that the details of the decision of senators, may significantly affect the mood of the market.
Thursday will be a regular meeting of the FOMC, which is not possible, try a few “cool” the negative trend, the developing world, including the stock market in recent days.
Finally, soon enough, on 2 February this year, held a regular meeting of the financial management of the leading countries in the world that, in accordance with the experience of recent quarters, is also unlikely to be a contributing factor to an increase in risky investments in the segment “bear” position.
Perhaps some further restoration of the EUR /USD lost their positions in recent days in the near future will continue. Nevertheless, the probability of a mid-term weakening of the single European currency to the U.S. dollar continues to appear relatively high.
The major drivers of this version of events may be to reexamine the market with higher levels of risk associated with the possibility of overheating Chinese economy, as well as over a long period ignored by investors factor in the increase in recent years, the level of total external debt to GDP of EMC to a record in terms of statistics of the leading economies in the world mark in 200%.
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