President George W. Bush promised the world that the dollar would be strong; however it is a weak dollar that may save his career
The week is beginning with obviously exaggerated expectations concerning reviving of the American economy and the opportunity of the dollar's increase. The dollar registered a slight increase at the morning trades in Sydney (Australia); as of 11:45 a.m. the dollar-to-yen rate was registered at the level of 118.19 yen per dollar, the euro-to-dollar rate – $1.1460 per euro. Traders suppose that the dollar rate is supported by the positive attitudes on the markets that are encouraged with an increase of the leading indicators. But activity of the market makers is rather low in expectation of beginning of trades in Europe. The Organization for Economic Cooperation reported that the composite index of leading indicators increased up to 121.1 in May vs. 120.1, the revised indicator for April.
A dealer of the National Australia Bank says, the increase of the leading indicator is above the norm; however the indicator only demonstrates how many people want to believe that the US economy will recover. Market makers pay attention only to positive aspects and ignore weak economic indicators, Russia's RosBusinessConsulting news agency reports.
The European currency rate is reducing today. This is basically explained with expectation of a report about the unemployment rate in Germany that is to come out on Tuesday. Information about reduction of the industrial orders in Germany was published on Friday. Experts say that the number of unemployed in Germany, Europe's largest economy, increased by 11,000 people last months, and the unemployment level still remained on the level of 10.7%, the maximal position registered within the past 4.5 years.
ForexPF quotes the Citigroup currency department vice-president in Tokyo, Hideiko Inamura as saying that everybody hopes the economic conditions will get worse in the Eurozone as compared with the USA. However, some facts indicate that while the US economy is recovering, the situation in Europe is still oppressive.
Pedro Solbes, member of the European Commission for Economic and Monetary Affairs says that economic growth won't reach 1% upon the results of 2003; it is highly likely to be fixed on the level of 0.7%. Associated Press reports, Pedro Solbes spoke out in Rome after a meeting with Italian Economy Minister Giulio Tremonti and said that successful economic showing in the 3rd and 4th quarters of 2003 may result only in a 0.7-percent economic increase in the Eurozone. At the same time, he adds that EU experts predict economic growth for 2004 at the rate of 2.4%. As is known, the euro-to-dollar rate increased by 30% within the past 18 months; that in its turn marred the situation of European exporting companies on the market.
According to estimates of Hideiko Inamura, this week the euro may get down to $1.1325 per euro. The yen-to-dollar rate may reduce as traders suppose that the Bank of Japan may sell yens in order to curb the yen cost increase that negatively influences Japan's export to the USA. About 11% of Japan's GDP falls on export.
Meanwhile, politics is getting interfered with the market expectations rather actively. American economists say that the fate of the dollar is directly connected with electoral prospects of the incumbent President George W. Bush. American economists suppose that weak dollar may guarantee Bush a sure victory at the coming presidential elections, Reuters reports. Experts think that weak dollar will help George W. Bush win votes of the electorate in those states where Al Gore got a bit more votes than the incumbent president at the previous elections.
The euro-to-dollar rate reduction makes goods produced in the USA cheaper and more competitive on the world market. This increases export and may require creation of more additional workplaces. The industrial employment rate in Illinois, Iowa, Michigan, Minnesota and Wisconsin is higher than in the country in general. RosBusinessConsulting reports that increase of production activity in these states may become the strongest argument in a pre-election campaign of the president.
The situation hasn't changed in Russia after the 4th July break in trades. Last Friday, the Central Bank of Russia fixed the official dollar rate of 30.2906 rubles per dollar; the euro rate officially announced by the bank made up 34.7342 rubles per euro.
During the Friday trades the dollar rate slightly increased against the background of low turnover of the trades that was connected with celebration of America's Independence Day. As experts expected, the excessive ruble liquidity level on the market remained and resulted in strengthening of the demand for the dollar.
On Friday, the last workday some of Russian banks aimed at placement of spare rubles for the weekend; some money was invested in the dollar. The revived interest to the dollar is explained with an unstable situation on the stock market connected with the scandal about Russia's Yukos oil company. The state papers market is not so much attractive because of understated earnings yield.
In his presentation, Heine cited some scientific research that classifies pedophilia as "an immutable sexual orientation".
Not that long ago, American soldiers would train their skills to counter insurgent and partisan military organizations. These days, they are trained to show resistance to the regular army of a potential adversary