Major currencies trading in the range of previous day
On currency markets activity has a little diminished and major currencies failed to be determine the direction of further course. Even macroeconomic statistics data are not able to change relative balance established on the markets.
Positive reports from the euro zone just posed short-term support for the single European currency. German investor confidence growth exceeded forecasts of economists, reaching the 3-year high, so the signs may appear there that recession of the euro zone's biggest economy started weakening. Economic expectation index reflecting the recent 6 months aspect rose from 31.1 in March to the mark of 44.8 that became the biggest strength since May of 2006.
At the same time on stock markets had returned pessimism and understanding that it would be far enough from full-scale recovery of leading economies, especially very weak labour market. Expectations of market participants regarding the tightening of monetary policy the U.S. has suddenly come to end. As to economic data, they were mixed. The housing market showed a sharp recovery. The increase in construction by 17% to the annual mark of 532 000 was followed by the figures of the last month that predicted the growth to 454 000. The number of issued building licences which are the indicator of the construction sector activity in the coming months, also exceeded forecasts. PPI index reflects the first monthly decline since over 3 years without taking into account the volatility of petroleum product prices. Such a significant decline in US producer prices (maximum since 60 years) weakens inflation concerns, suggesting that the prolonged recession continues to have a negative impact on inflation.
The British pound suffered heavy losses after minutes of the Committee on Monetary Policy meetings at the Bank of England (BoE). The Committee on Monetary Policy of BoE unanimously voted at the June meeting for the preservation of purchase volume of bonds at 125 bln, for the necessity to leave its key interest rate at 0.5% as well. According to the protocols, while the economic news in the month prior to the decision on 4 June were largely encouraging the confidence that was showed by some indicators of financial markets and the polls have remained volatile. The Monetary Policy committee announced first signs that the asset purchase program has stimulated growing cash resources held by institutional investors. However, the growing pace of cash resources in households and non-financial companies remained at a low level.
