The consequences of the USD growth
This morning Forex trading session in Sydney showed the further growth of the United States Dollar in relation to other currencies caused by the actions aimed to the recovery of the economy of the country. This has also caused the growth of the US Treasury yields.
During the morning forex trades the Japanese Yen was at the point of 105.23 in relation to the USD and the Euro get the point of 1.5461 against the US dollar.
According to John Noonan, a Thomson Reuters IFR Markets forex analyst the currency of the US remains high meanwhile the US CPI numbers remain low. Consumer price index in April testified that the growth in prices reached the 0.2 percent and the core inflation numbers was only – 0.1 percent. However these numbers turned to be a bit lower than those expected. Moreover many experts suppose that the hardest times for the US have already past.
Noonan said that such opinion will contribute to the USD recovery. The USD continues its growth in relation to the Japanese Yen. The British pound is still in trouble situation which is caused by the negative forecasts for the UK economy and growing inflation levels. Stagflation is not something contributing to the growth of the economy and the UK seems to play tricks with it.
The Inflation Report issued yesterday caused the decrease of the British pound throughout the night. According to the Bank of England governor the technical recession may occur in the country (the first time since the 1990s).
John Noonan said that the economy of the United Kingdom is not covered from the troubles and the growing inflation complicates the tasks of recovering the situation the Central bank faces.
As for the Australian dollar it is also experiences the hard times. According to Noonan the Australian currency will not overcome the point of 0.9500 in relation to the USD while the last one continues to grow.
