Analysis

	International Currency Market Summary of June 17th, 2008.

The market challenged the intention of the American financial authorities to increase the interest rates. The US dollar growth stopped abruptly. From the Friday lows of 1.53 the Euro went to by 250 points to 1.5550 and the pound by 290 points from 1.9410 to 1.9700. The dollar dropped early this week in the whole range of financial instruments. Oil futures reached 140 dollars per barrel and gold went up from 866 to 895 dollars per troy ounce within the Monday morning session.
In spite of the rough remarks by the USA FRS Head B.Bernanke regarding the dangers of high inflation, the US dollar continued to fall against the major currencies. The only exception is the dollar-yen rate, in which the dollar has already reached 108.60. A correction, which followed after these events, confused the players. The pound dropped by 1.9470 after information on inflation in England was made public and the Euro sales started after the Investor Confidence Index ZEW was made public.
The market is waiting for the statistical information on the US economy, which will be made public tonight.
So far market participants are digesting the remark of Mervyn King, the Governor of the Bank of England, that by the end of 2008 inflation rate will reach 4% and so far he sees no ways to bring it back to 2%.
The pound-yen and Euro-yen cross rates are growing slowly but steadily. The goals are at 214.80 and 169 correspondingly.
The Canadian dollar is being traded in the corridor of 0.9750-1.0325 in spite of the rapid growth of crude oil prices.
The main question of the last few days concerns the rates in the USA. In case the economic statistics confirms the necessity for their increase, the US dollar will be able to return to the earlier established levels. It is obvious that we are at the point, from which a long-term turn may start in favor of the American currency. However, high uncertainty of the current situation does not let us talk of the turn with confidence.