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According to the announcement of the South Korea’s Vice Finance Minister the consumer inflation in the country will not overcome the level predicted in July as the oil prices have decreased sharply. He has also said that foreign exchange controlling bodies will interfere the situation in case national currency - won, will grow rapidly and the government still works on the stabilizing prices policy.

Due to latest news from Columbia its currency has increased a bit caused by the decreased possibility of slowing inflation. According to Alvaro Camaro a chief analyst at Stanford Financial Group’s unit in Bogota the growth of the economy is expected to decrease by 50 percent throughout this year. He has added that the market supposes that the inflation will slow after the August.

Last month China announced that its forex reserves overcame the point of $1.8 trillion. This was even higher than the forex reserves of the Japan in 2006. Such high numbers of foreign exchange reserves shows only that the country possessing it is able to pay other countries for products and debts. But in the current situation China doesn’t even own the biggest part of the reserves.

The United States dollar kept its high positions supported by decreasing oil prices and several certain announcements from the Federal Reserve. The oil prices have decrease below the $130 a barrel point and the Charles Plosser at the Fed made his announcement concerning the possible inflation. Due to his words growing inflation could cause the Federal Reserve to increase interest rates before any recovery at the labor and financial markets and this is quite supportive for the USD. Moreover the USD was also supported from the announcement of the Hank Paulson – US Treasury Secretary who said about the importance of the strong currency.

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).

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.

What can impact the currency trading?

There are many factors that can contribute to the forming of the exchange rates however such of them as supply and demand are the major ones. The changes in supply and demand data also cause the corresponding changes in the price of one currency against another one. The Forex market provides the most comprehensive information about the current situation in the world.