The dollar falls but its growth is expected
The Tokyo Forex session showed a decrease of the United States currency in relation to Euro that was caused by the effect of the short-term players. So this is the fall that followed the increase of the USD occurred yesterday after the opinion that the US economy will not witness a recession appeared.
As for the USD/Japanese Yen rate it was quite unstable and decreased as the Japanese government stated the growth of the GDP numbers for the first quarter of the year. However the decline of the USD didn’t last for a long time as the fund managers and investors from other countries supported the greenback.
The USD was traded at the point of 104.67 in relation to Japanese Yen and the Euro was traded at 1.5470 in relation to the USD.
However the short-term forecasts concerning the USD got better after the concerns about world credit crisis and US economy recession declined. The announcement by the Japanese government about the unexpected growth of the economy brought the USD at the point of 104.57 Yen. However the Yen didn’t remain high for a long period of time.
According to the head of the Forex foreward trading at Sumitomo Mitsui Banking Corporation the increased GDP numbers were the indicators of the elasticity of the economy that caused the purchases of the Yen. But these numbers were not high enough to be the cause of longer purchasing of the Yen.
Now there is an opinion among experts that the USD forecast is quite positive, this belief was caused by the fact that investors ignore the economic numbers that are negative for the greenback.
According to John Noonan a senior Forex analyst at Thomson IFR Markets it is quite hard to give a definition of such fluctuations as the markets have different standards and initially expect different numbers.
The NY Fed’s Empire State Manufacturing Index decreased below the zero point and reached - 3.23 level.
As for the European GDP numbers they are estimated at the 0.7 percent for the first quarter of the year. Noonan also said that the markets are trying to contribute to the equities growth and the Euro/USD rate fall. Besides the other concern of the markets are the investments into the USD made by fund managers from the US. Mizuho Trust & Banking Co Forex dealer Kazuyuki Kato said that the US fund managers compensate their funds by investing into the currencies of new markets.
Thus the USD is likely to grow further in the short-term outlook reaching the point of 105 yen or even overcoming it, added Kato. Moreover according to Kato another reason of the further USD growth will remain the support of the US fund mangers. As for the Euro, Kato supposed it would not go below the point of $1.53.
