Courses of foreign currencies
Events of the last week allow to say that new borders in which limits it is possible to consider dollar stable in relation to mark - 1,7150 - 1,7350 were defined. Probably, the mark of 1,7150 marks for the dollar, fixed in the end of a week before last, became not which point of crisis, and during some time smooth growth of a dollar exchange rate (on 50 - 60 points in day) will take place. Basically it is caused by the wave which has swept across Europe of reductions of the interest rates undertaken by almost all European central banks after Bundesbankom.
the Exit for borders of a new corridor will mean the beginning of an excessive demand for dollars or marks. In case the dollar will pass a mark 1,7360, follows, obviously, to expect rally for 1,7450 and in case the dollar will fall more low 1,7120, dillery predict “ weighting “ marks to 1,6880. Both these extreme measures, however, are improbable, for so strong fluctuations can be caused only essential enough economic or political changes in the USA or Germany. However next week such changes it is not expected yet as it is not expected also new changes of interest rates neither on dollar, nor on mark. It proves to be true the recent statement of the chairman of Federal reserve system of the USA of Alan Grispena that though FRS has closely approached to the next increase in the interest rate on dollar, hardly it will occur in the near future. Therefore the parity which has developed in the market will break difficultly enough.
the yens Disturbed by fast growth, Japanese last week made huge efforts at least to keep national currency at that level on which it has appeared past Monday. There is no saying, in how many it has managed to Bank of Japan, but its efforts have not gone to waste, as by a weekend the yen was stabilised at level of 105,50 yens for dollar, despite desperate resistance of speculators. Meanwhile, according to the Bank of Japan, the Japanese economy continues to remain in a stagnation condition, and any growth in the near future is not expected. The bank of Japan, as appears from the statement of officials, will be and henceforth to try not to admit strong growth of yen, and it means continuation of injections on the market of large monetary resources.
last week as it also predicted, the pound sterling showed enviable stability in relation to dollar at level about 1,4750 dollars for pound. However, in relation to mark pound to any moment has unexpectedly fallen to a mark of 2,53 marks for pound, but it was quickly corrected, and by a weekend did not fall any more below level 2,5450. In immediate prospects (week - one and a half) the course of pound under the influence of the good data on the English economy, published last Tuesday, and forecasts of experts Central Statistic Office about continuation of economic growth in 1994 - 95 years will smoothly grow in Great Britain to marks 1,49 - 1,4950 in relation to dollar and will keep stability in relation to mark in a corridor 2,55 - 2,5680. Analysts unanimously predict decrease in interest rates on pound within a year, but further rates will grow that will add stability to pound which has lost its part from the moment of an exit from ERM.
In a weekend long expected decrease in the rate on the French franc has taken place - the Bank of France has lowered the intervention rate with 6,2 to 6,1 % that, however, has been named by analysts “ The vague decision “. On the near future they predict to franc the period of instability and, first of all, in relation to dollar - next week the course can fall to 5,91 - 5,92 francs for dollar.
cross-country - Deutsche Mark exchange rates
As changed depositary/ credit rates for a week
In the table the information on annual interest rates under interbank deposits and credits for the term from 1 day till 1 year (in brackets of their change for the last week are supplied. It is obvious that on a number of currencies the rate changes nelinejno, decreasing with growth of term of the credit/ the deposit. In this case it is possible to say that inflationary expectations of participants of the market concerning this currency are strong, and change of rates allows to judge in what party they change - amplify or weaken: If the increase in rates of inflation is expected, rates for longer term decrease. The second circumstance which needs to be taken into consideration taking into account expected change of rates of inflation - a parity of rates on various currencies. It allows to judge as well the course parities predicted by participants of the market on distant prospect. High, taking into account inflation, rates protect currency during the moments of strengthening of gamble in the market, doing its more attractive.