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07.04.2016 18:21

American focus: the US dollar does not cease to lose ground against the Japanese currency

The euro rose against the dollar, recovering to the level of opening of the session. Experts note auction was held today quite volatile, which was caused by the publication of the minutes of the last meeting of the ECB and the statements of representatives of the ECB. Minutes of the March meeting of the European Central Bank showed that officials discussed the issue of more aggressive rate cuts. Also strengthen the risks of second-round effects were observed. It was unanimously recognized the need for a strong response in the circumstances, but opinions on the composition of the package varies widely. Central Bank representatives were informed that the outlook for the global economy has deteriorated again. Some expressed concern that the operations of the Central Bank may affect the independence of the bank. Fears were expressed that the further reduction of deposit rates will affect the profitability of banks.

As for today's statements by representatives of the ECB, they clearly gave to understand that the Central Bank will continue to struggle with low inflation. First, the ECB head Draghi noted that an updated package of mitigation measures presented in March, confirmed that even under the influence of external disinflation forces the ECB will not tolerate excessively low inflation. Meanwhile, the chief economist of the ECB Pret said that the ECB may adopt additional measures to stimulate the economy to offset the impact of the recent turmoil in the euro-zone economy. Meanwhile, another representative of the ECB Constancio added that the Central Bank will continue to do everything possible within its mandate to bring inflation back to the target level of 2%.

Little impact has also provided statistics on the US labor market. The Labor Department reported the number of Americans who first applied for unemployment benefits fell more than expected last week, suggesting that the labor market continued to strengthen, despite the restrained economic growth. Primary treatment decreased by 9,000 and a seasonally adjusted amounted to 267,000 for the week ending April 2nd. The data for the previous week were not revised. Economists had forecast that the initial applications will fall to 270 000. The number of applications for unemployment benefits remained below 300,000, a threshold level of health-related conditions in the labor market for 57 weeks, the longest period since 1973. Strengthening labor market attracts discouraged and new job seekers, which will continue to moderate growth of wages and allow the Fed to maintain its policy of gradually raising rates.

The dollar continued to decline against the yen for the first time since Oct. 29, 2014 fallen below the level of Y108. It is worth emphasizing, falling USD / JPY pair is fixed for the fifth day in a row. Since the beginning of the month the pair has lost nearly 4%. Analysts said speculation about a possible Bank of Japan intervention intensified, but so far only the motion of a pair reflect market volatility. Although the Central Bank of direct interventions are unlikely, the authorities may try to influence the market through verbal interventions. At the same time, experts say, is now technical factors have a greater impact on the market than the change in economic conditions.

Also, investors prefer to sell the pair, given the tendency to loose monetary policy of the Fed. Minutes of the Fed meeting, which was held on March 15-16, indicated that the US Fed is hardly raise interest rates until June amid widespread concerns of representatives of the regulator in connection with disabilities confront the consequences of global economic slowdown. "Most of the participants believe that the economic and financial situation in the world still pose a risk," - said in the report. Following the meeting, the representatives of the regulator made it clear that they expect two rate increases in 2016, but the exact dates are still uncertain.

The pound depreciated moderately against the dollar, heading to yesterday's low. According to analysts, the main pressure on the currency have concerns about Britain's exit from the EU structure. Reuters survey showed that if a referendum on June 23 the majority of Britons would vote to secede from the European Union, the national currency may collapse by 7 percent. However, results of studies have also indicated that if the country is to remain within the EU, the pound could rise by 4 per cent against the dollar immediately after the referendum. "Recent trends underscore how the pound is vulnerable to any change in sentiment before the referendum a few months, and the pound is likely to continue to trade without some movement.", - Said Jane Foley, an expert the Rabobank. The median estimate of 60 analysts, one euro will cost 79 pence in the next month, to 75 pence after 6 months, and 73.5 pence in 12 months. Against the dollar, the pound will trade at $ 1.42 a month, $ 1.43 in three months and the prospects for $ 1.48 in a year. In March, the corresponding forecasts were $ 1.40, $ 1.40 and $ 1.46.

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