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According to the latest forex trades data the United States dollar became stronger in relation to the Euro after the issue of quite positive US earning reports that provided a strong incentive for the stock market.

The Central bank of the US issued the earnings reports for the second quarter of the year that turned to be of $0.72 better than the expected $0.53. These news lead to the talks of banking sector of the country becomes more stable. Moreover the reports under consideration provided more than 6% growth of the Bank of America shares in pre-market trades. Thus the Euro decreased to the point of $1.5857 from previous $1.5908.

The sharp fall of the USD in relation to the Euro was caused by the worries concerning the US mortgage market and its consequences for the country economy.

The intention of the US government to provide some emergency assistance to large mortgage companies – Fannie Mae and Freddie Mac caused sharp decrease of the confidence in this market and the hike of the Euro to the point of $1.6038. Members of the market suppose that the assistance to the mortgage companies will be nothing but additional several billions of dollars that will increase the national debt and thus decrease credit rating of the whole country.

The United States dollar is still decreasing in relation to the Euro and it seems to reach its lowest point again. This was caused by the reason that the US Treasury intention to provide emergency assistance to the largest mortgage groups – Fannie Mae and Freddie Mac was not sufficient to settle down the rest of market members.

According to the last forex trades data the European currency comes to the point of $1.60 and the British pound increases over the $2.00 mark this is the first time the British currency has reached this point throughout current month.

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.

Asian forex trades finished with the firm United States dollar in relation to majors as the Federal Reserve made no surprises for the markets after the interest rate decision was taken. The interest rates remained unchanged as it was forecasted. The Fed’s officials repeated its fears about the possible growth of the inflation and gave no hints where the interest rates will move in future. The Federal Reserve make no changes in the level of interest rate even after the announcement of the European Central Bank to raise the rates in July.

The afternoon forex trades in Asia resulted in the growth of the United States dollar in relation to the Euro and Japanese yen. The reason of such growth trend was the talks concerning the possible declaration of the Federal Reserve its intention to increase the interest rates with the aim to constrain the inflation. The FOMC begins today the meeting that will end with the decision concerning the level of the new interest rate.

The forex trades resulted in low Euro after the European numbers showed a trend of decreasing economic data as the European Central Bank wishes to increase interest rates. For instance the German data (Ifo business climate index) decreased by over 2 points throughout the June and has reached the 101.3 point which turned to be quite below the forecasts provided by the experts. The same happened with expectations component that decreased to 97.2 point.

The last forex trades showed the further growth of the Euro in relation to the USD after the comments by the European Central Bank official – Lorenzo Bin Smaghi and unexpectedly high level of the German producer prices. Due to his forecasts there will be further growth of the commodity prices and the interest rates will be increased in case other factors will not contribute to the decline of the inflation level.

The growth of the retail sales volume in the UK increased expectations concerning interest rates growth and thus increased the British currency too. According to the data provided by the Office of National Statistics the retail sales reached the highest level throughout the May increasing monthly by 3.5 percent. Such growth was quite unexpected as the forecasts provided by the experts supposed only stable volume of retail sales (with 4.2 percent annual growth) not growing one (8.1 percent annual growth).

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The United States currency remained at quite high positions in relation to other currencies throughout the morning Forex trades in Sydney as investors considered the duration of the USD being strong. So the USD was traded at 104.74 yen and the Euro – at $1.5654. The gains of the USD were caused by the positive data provided by the durable goods orders report for the April. As for the new orders for the goods related to durable ones decreased only 0.5 percent throughout the April thus showing the outlook for the 1 percent decline was the wrong one.

The dollar rallied on Thursday, rising to a three-month high against the yen, on data showing the U.S. economy grew in the first quarter faster than previously estimated and as hawkish Federal Reserve comments boosted expectations for an interest rate increase this year.

Dallas Fed President Richard Fisher said on Wednesday the the Fed -- the U.S. central bank -- could increase benchmark rates "sooner rather than later" if inflation expectations worsen. The comments prompted a jump in short-dated U.S. Treasury yields on Thursday.

There were a lot of talks recently concerning the fact that the Federal Reserve will not decrease interest rates anymore. However nothing is clear and exact and many experts are not sure that this will turn to be so. But the previous Friday eliminated all those thoughts when quite positive jobless rate report was issued that caused Forex markets suggest that situation occurred in the United States may turn to be not so bad.

The United States currency experiences growth caused by high numbers of employment index and possibility of the Federal Reserve to increase the liquidity at the financial markets with the help of the Term Auction Facility auctions extension and Fed’s agreements with Central banks of other countries.
The Fed’s intention is to increase TAF auctions from $50 billion to $75 billion and extend its swap agreements wit central banks of Eurozone and Switzerland.

There is nobody who’d like to experience the situation the Federal Reserve is in at the moment. The monetary policy meeting has begun. The Fed faces the possibility of lowering growth on the one hand and growing inflation level on the other. Moreover these two problems has only exacerbated over the past weeks. The US employment sector deteriorated throughout 3 months and we suppose it will continue this trend for the fourth month.