The USD grew a bit, as major indices reflected no hints for recession
The results of the Forex trades were not bad one for the United States currency. It has increased a bit after the issue of the major economic indices that have shown the possibility of ceasing any recession trend of the US economy. The outlook for the economic activity provided by the NY Conference Board increased by 0.1 percent throughout the April and by the same number in March too. However the Board suggests there could be a certain decrease in the future. According to the Conference Board official the numbers they have provided can show a really weak economy but not the recession of the economy.
Moreover the IFR Markets official – Matthew Foster-Smith said that the major indices were weak however the fact that there were no hints on possible recession of the economy contributed to the growth of the United States dollar. The lack of the economic data was also the reason of currencies trades that were held in narrow ranges. Several reports are expected to be issue later this week. For instance a ZEW index will be released on Tuesday and it seems to grow a bit up to –38.0 after the 8.7 points decrease it experienced in April.
It is also expected IFO business climate index to be issued on Wednesday and according to analysts’ forecasts it will decrease reaching 101.9 point in this month. It is one of the indices having key impact on the euro moves.
Moreover the minutes of the last Federal Reserve meeting will be released on Wednesday. It was the meeting when a decision of 25 bp rate cut was taken and the end of the interest rates decreases period declared.
According to Daragh Maher – a senior Forex strategist at Calyon the Federal Reserve is likely to pursue “wait and see” policy and furthermore there is no guarantee that the bottom of the Fed funds was already reached as the Fed’s official announced it.
