Euro still falling
Over the past two weeks, the dollar could continue its growth and updated at least one year. This strengthening of the dollar did not occur due to increase in dollar-yen. On the contrary, there was a return of crisis correlations, as we wrote in a recent survey. Euro-dollar, euro-yen and, to a lesser extent, the dollar-yen, declining. Declined and stock markets, the Dow Jones fell from a peak of 10729 to 10043 to a minimum. Leaving an U.S. statistics up to yesterday”s Friday not too pleased. The decrease showed the data bookmarks homes, sales of homes in the secondary and primary markets. Again began to grow weekly applications for unemployment benefits. Rostam moods “away from risk” contributed to the negative of the euro area (the problems of compliance with budgetary discipline in Greece and Portugal). In another way, as the reason for the growth of optimism can be measured increasing rate of redundancy in China”s banking system, as well as publication on 27 January in steytmente solutions Fed mentions that a member of the FOMC HONIG voted against the phrase “a long period of extremely low rates guaranteed. However, the tightening of monetary policy, on the other hand, strikes the stock market. On Friday, the Dow Jones index fell by 0.52% despite the astonishing output data on the growth of U.S. GDP in the 4th quarter, the first assessment of growth was 5.7% per annum. But even if the dollar-yen failed to show up on the rebound of these data, after the minimum shown last week at around 89.12, it rose to 90.91, is now trading at 90.40.
We continue to believe that until we see the rise of the dollar owing to the accelerated growth of the dollar-yen, the euro-dollar will not start. Return crisis correlations (falling risk appetite) in the current situation looks rather strange, considering that all the same, despite the very rough data from the U.S., the economic situation in the U.S. is improving. In this sense, and the growth of the past two months, the dollar looks strange. We have always written that the U.S. dollar”s decline in profitable period of economic growth, since the weak dollar supports American manufacturers. In fact, a sharp increase in the dollar the last two months simply undermines the recovery in the U.S.. President Obama has recently set the ambitious goal to increase exports of U.S. goods doubled in 5 years and to adapt to new markets. ” It is very difficult to imagine the implementation of this goal without significant devaluation of the dollar, to fulfill such a goal should be a devaluation of the dollar by at least several tens of percent, if not a multiple of devaluation. But in the past two months the dollar has grown rapidly, and it seems illogical and also because the U.S. Treasury in recent weeks, significantly reduced the amount of attraction. Thus, the last two weeks on Tuesdays placed 4-week bills only 10 billion dollars (the usual amount in previous months 25-30 billion dollars), on Mondays accommodates 3-month and 6-months. bills at 23 and 26 billion respectively (normal volumes in recent months, more than 30 billion for both). Thus, the ongoing growth of the dollar does not need the U.S. Treasury to raise capital, nor the U.S. economy, because it harms domestic producers. From this we conclude that the growth of the dollar is a purely speculative purposes. It will be relatively short-term and be replaced by a fairly rapid reverse movement. But apparently, this growth of the dollar is not over. We assume that in the near future there is a marked correction from current levels and then yet another update at least through the growth of dollar-yen.
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