As Easter approaches, the liquidity of securities is decreasing, and this can results in instability of currency exchange rates.
On April 7 escalation of violence in Iraq deteriorated the position of the US dollar. Growing credit rating of the liabilities in foreign currency for Japan dropped the dollar exchange rate to Japanese yen. The relatively stable exchange rate of the dollar to yen stabilized the US dollar.
The exchange rate for Euro and other European currencies started increasing after the news from Iraq and the statement by Chief Economist of European Central Bank O. Issing that the Bank’s interest rates are sufficiently low to support economic growth in the region and maintain stable prices in long-term perspective.
On April 7 the US Department of Labor published the report on the prices for import and export products in March. The report informed on 0.9 percent growth of import prices index in the USA in March (in February the growth was 0.4 percent). The experts predicted more moderate growth, not more than 0.6 percent.
The trend of import prices growth has existed for 6 months. The economists comment the report of the US Department of Labor as the signs of possible increase of prices caused by accelerated tempos of the US economy growth and weakening the positions of the US dollar.
The US stock exchange did not demonstrate success on April 7. The biggest world producer of aluminum Alcoa Inc. Reported that the company profit in the first three months of the year grew more than twofold, but this figure was less than the economists expected. The trading session was closed with losses for all main stock exchange indexes: DJI -0,9 percent; S&P-0,7 percent; NASDAQ -0,5 percent.
On April 8, a weekly report on applications for receiving unemployment allowances is to be issued in the USA. The report is doomed to confirm the information on reducing the number of dismissed personnel in the US companies. However, not this, but the growth of hiring new personal is of key importance for the US economy. This trend will be hardly revealed in the report, and it will diminish the report’s influence on the positions of the US dollar.
Analysts of FIBO Group Inc