Dollar might go up if exchange rate was fixed, SKB-Bank says

29 April 2008 (09:17)

‘Contrary to earlier expectations, last week turned out to be very eventful for the foreign exchange market. The global leaders, that is, the dollar and the euro, reached some new heights and depths,’ says SKB-Bank’s Dealing Director Anton Khavin.

‘The U.S. dollar dropped against the euro on Wednesday, reaching its lowest-ever minimum, which many experts believe signifies the beginning of a gradual downfall. On Thursday, the euro exchange rate plummeted to 1.565 USD/1 EUR, which was the worst result in the last four months. It looks like the dollar was supported by the good news regarding the U.S. economy and the European Central Bank’s reluctance to further fortify the euro,’ he noted.

The global turmoil couldn’t help affecting the Russian market. On Friday, April 25, 2008, the average dollar exchange rate went up by 16.16 kopecks and came to 23.6 RUR per dollar, while the euro exchange rate went down by 19.8 kopecks and came to 36.96 RUR per euro. The Central Bank of Russia introduced the 36.94 RUR/1 EUR and 23.6 RUR/1 USD rates on April 26, 2008 – the best dollar growth and the worst euro drop in April 2008,’ Anton Khavin said.

‘The U.S. Federal Reserve System meeting on April 29-30, 2008 is going to be this week’s highlight. The prime rate might be decreased again, even though keeping the rate fixed could allow the dollar to retain its position or even keep going up,’ he observed.

‘As for Europe, the market is looking forward to getting the data from the European commission’s economic growth forecasts and to hearing from the head of the European Central Bank in Vienna,’ the expert added.

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