Dollar under pressure after announcement from BRIC summit
After 2-day gains the U.S. dollar came into pressure after the announcement from BRIC summit meeting about plans to put some reserves into alternative currencies and to intensify the role of national currencies of these states in international settlement. Although Russia's financial minister Alexei Kudrin on Monday said that Russia had no plane in recent future to refuse the U.S. dollar assets to a considerable degree and put its reserves into non-dollar-based assets. Nevertheless markets concern that another BRIC countries could support Russia's wish to diversify their reserves at the expense of lowering dollar quota.
German economic expectation index in June rose from 31.1 for May to 44.8 on forecasts of experts who supposed economic recovery start by the end of this year. The Data reported Thursday by Centre of European Economic Research (ZEW) demonstrated it. July's index figure was at the highest level since May of 2006. The economists' consensus supposed the index figure showed 37.0. On the back of it euro/dollar reached the session high at 1.3920, but failed to hold above the level at 1.39.
The British pound came into pressure on the Asian session on pound-selling versus the Japanese yen. Against the greenback sterling dropped to the level at 1.6209, but took back losses, recovering above 1.64 after UK inflation data report. UK consumer price index rose in May by 2.2% as compared to that of the last year after 2.3%b growth in April. Although annual growth index in May became the weakest since December of 2007, but at any rate exceeded the expectations of economists who awaited 2.0% growth.
The yen steeply gained against the major currencies due to worsening situation on stock markets catalysed market players' risk aversion. The meeting at the Bank of Japan gave support for the yen. General estimation of economic situation was revised upwards after industrial production, export and consumer sentiment indexes were stabilized.
