Analysis

	International Currency Market Summary of June 25th, 2008.

The market is waiting for the US FRS decision on the rates, which will be made public at 10.15 p.m. Moscow time.
Stock markets are feverish. The currency market however is calm.
 
 The Euro is trading in the upward trend. Its falling below the lower limit of 1.5520 will result in new sales with the goals at 1.5440 and 1.5380. If the Euro rate goes up to 1.5650, this will result in its growth to 1.5750. It is obvious that an increase in the American rates will result in the Euro going down and the dollar going up. However, even if the rate is not increased (which is the most probable scenario), attention will be concentrated on the officials comments.

   The same is true for the British pound. Its growth to 1.98 does not seem strongly supported. In case this month closes below 1.9560, the downward trend will start again. In case of a closing below 1.9380, the trend will strengthen and the goal will be 1.9180, going below which will indicate a turn in the pound-dollar rate.

  In most currency pairs trading is within the range. This refers to the dollar-yen, dollar-franc and the US-Canadian dollar pairs. This range is not likely to be overcome before the issue of the rates.

   If the accompanying statement of the FRS directly indicates a threat of inflation and a necessity to strengthen the monetary policy in September, the Euro may undergo massive sales, even if today’s resolution is neutral. The dollar will correspondingly grow on the whole range of instruments. The question is when the rates will be increased. If the accompanying statement does not contain information on a possible increase of the rates in September, the market reaction may turn negative for the dollar as the problems, which are being solved with words only, bring more concern than actual actions.

 Inflation export in the whole world, on the one hand, and non-willingness of the US authorities to solve economic problems with strict measures, on the other hand, may bring financial markets to a strong disbalance. The decision of the American authorities to use administrative measures for the market (as in the case with futures) will not have good results. The currency rates are presently stable, but the situation is not likely to remain the same for a long time.
Thus, we can recommend abstaining from active trading until Thursday.