Analysis

	Currency Market Summary for the period of March 4th – 14th, 2008.

The ongoing dollar fall on the whole range of financial instruments has a negative influence on the world economy. However, understanding that nothing can be done, the European leaders are careful in their statements. The Euro has gone for stops above 1.56 followed by a turn. The rate left the range of 1.5280-1.5490. The upper limit of the range is at 1.5635. The wave level is 1.5600. The next resistance of 1.5664 has already been reached. Only a breakthrough below 1.5450 will be a sign of gradual dollar strengthening. This sign may appear after the FRB resolution on March 18th if the rates remain the same, which is not quite likely. The British pound has almost reached 2.04, having reached 2.0391. The resolution on the rates will define the further development. Prior to that the rate will be in a wide range of 2.0180 – 2.0400. The Japanese Yen strengthened more than other currencies, having gone over 100 Yen per dollar for a short time, the high of 1995. The continuous strengthening of the Yen has been going on for nine months. Over this time the dollar has dropped from 124.14 to 99.80 yen per dollar, i.e. by 20%. That’s strange that the Central Banks did not do anything, though ten years ago with the rate of 148 yen per dollar under the FRB pressure, the Japanese Central Bank had to carry a massive intervention. They reduced the rate over a thousand points within one day. Its too early to talk about a turn in this pair, thus a decline to 99.20 and 98.70 is expected with a further correction to 101.20 and 102.40. The Swiss franc has broken through the par value with the US dollar. The low was 0.9987. This process has been going on since June last year. Just as in the case with the Japanese Yen, the franc has strengthened by over 20%. If the trend of the dollar weakening is not broken in the near future, the par value will be broken through. However, it’s likely to happen immediately, but after a correction to 1.0350. The Canadian dollar is being traded in a narrow range under the par value.  Having started at 0.9712 and 0.9736, the rate could not rise above the par value, which signifies a preferable development of the trend of the American currency weakening. A decision on the rates in the USA on March 18th can change the situation drastically, but there is less and less hope for that. The statistics do not show a sharp increase of inflation. The growth of gold prices up to 1,008 dollars per ounce and oil prices to 106 dollars per barrel as well as new problems with the Bear Sterns fund, which can become bankrupt - all this puts pressure on the dollar. Under these circumstances the FRB is not likely to make a pause in the monetary policy weakening.