According to the latest data the United States dollar remained unchanged and kept its strong positions after the government of the country provided efficient assistance to large mortgage companies – Fannie Mae and Freddie Mac.
Due to Hank Paulson – the US Treasury Secretary mortgage companies in a bad condition will get additional liquidity as well as promise for stakes to be purchased in case of the worsening of the general situation at the market.
Neil Mellor currency strategist at Bank of New York Mellon said that the United States Dollar continued its growth after the announcement of the US Treasury to provide an assistance to large mortgage companies.
On the other hand the growth of the USD was quite limited. This was caused by the last Friday article that announced about the efficient assistance in the conditions of unclear situation about the US economy and the change of earnings results from large US banks. According to Johan Javeus – forex strategist at SEB Merchant Banking – the current actions may bring only temporary relief as the general situation is still negative for the USD.
Next week will provide us with the report from Ben Bernanke on monetary policy and economy. The main attention from the markets will be paid to his further intentions concerning anti-inflationary measures in quite negative financial situation for the whole country.
As for the financial markets they have decreased their expectations for the interest rates growth from the Federal Reserve and now think it will happen only in the autumn. Neil Mellor said that the European Central Bank will act even in the worries about the general condition of the euro zone economy while the Federal Reserve is still battles the growing inflation and fights for the strong USD.
Until present European Central Bank has only increased it key refi rate by the 0.25 point. The European inflation data is to be released on Wednesday and it will show whether the ECB will make any other increases until the autumn.