Analysis

	Foreign currency market performance overview, April 25, 2008.

Euro reached a new historical peak 1.6020 dollar-mark, then the profit taking began, and the currency rate rolled more than 450 points away – to 1.5560. This major correction within a short period leaves no hope for the immediate progress of the downtrend – in anticipation of the FRS decision regarding the rates the market will be jumpy and the increase to 1.5880 is quite possible. The level of 1.5550 is an important support point, its reach can result in the start of purchases at 1.55, but they will hardly be lasting. The pound was updated in the middle of the week from 2.0020 to 1.9680, but the today-published GDP data turned out to be worse than the forecast and all of a sudden happened to stipulate the purchase of the British currency. Rollback from the minimum level had composed 200 points within three hours, which proves that the market is becoming more and more jumpy. At the following US FRS session that will be held on Wednesday, April 30, the rates will most probably be reduced, but the market awaits the signal of the soon ending of the monetary policy weakening cycle. On the other hand, the Central Bank promises the rate reduction during the following summer. Trying to avoid the possible scenario, the major players started massive Euro sales. If such scenario still comes true, Euro will rise to 1.59-1.60, after which the update will be more lasting and the 1.55 level will be hit. The inflation results in Japan happened to be worse than the forecast, which pushed the USD to grow against the Japanese yen – the maximum of the today’s European session was 104.80. The Swiss frank has rapidly weakened its positions along with USD, first yielding the parity, and by now having lost as much as 4 cents, - 1.0433, and all this took only three days. After the one-month trades in the narrow tunnel of 0.99-1.02, the prices shot ahead and are now trying to reach the point of 1.05. The hit of that level will define the next medium-term goal – 1.0750. Disregarding the American real estate market degradation, mortgage bond write-offs and the future rate reduction, USD demonstrates a confident growth, which can so far be viewed as correctional. The possible deployment of the long-term trend can be evaluated only during the first ten-day period of May.