Dollar gains before G8 meeting
The U.S. dollar extends gains on Friday, taking back lost positions on Thursday. On Friday G8 meeting will start in Italy and although currency market does not stand on agenda, market participants seem to reduce risks and diminish short-dollar positions. On the contrary the most active discussion on the topic of currency market is led in emerging market countries, in view of that market pays large attention to BRIC meeting (Brasilia, Russia, India and China) which will start from 16 June. Taking into attention that total gold and foreign currency reserves of these countries are more than 2.7 tln dollars, none of these countries is not interested in lowering American currency. China made obvious attempts to inspire new life in relations with the U.S. and refused negative comments to the U.S. dollar and underlined necessity of cooperation.
On New York session Euro/dollar fell from the session high at 1.4172 to 1.4070. The British pound did not reach a little the recent high and held at 1.6621 – it is the significant growth of sterling from the beginning of this week sparks wish of market players to take profits.
Reports on macroeconomic data give additional support to the dollar. The budget deficit in France was sharply increased for the first four months of this year as compared to that of the last year that came out from the government anti-crisis measures, aimed to pulling the country out of recession. On balance of the end of April France's budget deficit for the first quarter of this year is 71.9 mln euro, at that time the deficit of the analogical period of the last year was 45 bln euro. Diminishing industrial production in the euro zone marked 1.9% against the forecast of 0.6%. At the same time the contraction on year-over-year basis recorded -21.6%.
