American focus: USD has trapped by reorganisation of staff in US Treasures and weak Cons. Confidence. [E]

On Thursday, USD dropped to 6-weeks lows against Euro and JPY on concerns that John Snow leaves his post. Participants warns new Secretary will promote furthered USD depreciation to support US export. The dollar's decline began in Asia after Gerard Baker, a columnist for the London-based Times wrote that Donald Evans, Bush's former commerce secretary, may succeed Snow. The currency briefly trimmed some losses after new reports that it would be Paulson instead of Evans.
``There's always a sort of fear of new initiatives being taken by the administration when there's a change,'' said Alan Ruskin, head of international currency strategy at RBS Greenwich Capital Markets in Greenwich, Connecticut.
Baker remarked Evans can admit USD drop and he did not say where from this information. People from Wall Street, according to article, prefer to see strong USD but politicians and exporters wants weak currency and as Baker said Evans belongs to second category. In the beginning of American session Bush approved the candidate Henry Paulson , CEO Goldman Sachs Group Inc. on position of future Treasury's Secretary. It gave temporary support on USD.
USD was under pressure on the background of pessimistic expectations of coming economical reports. Probably FED will pause in the cycle of increase of percent rate (Federal Funds 25 years диаграмма Federal Funds 50 years диаграмма). Approach to 2004 USD defeated against Euro and JPY for three year. After strengthen in 2005 the rate drop has renewed. USD against Euro lost nearly 7.7%, against JPY - 5%. Speculations on possible pause led to dollar fall. Now key rate is 5%.
Issued today report gave bears one more argument for pessimistic sentiments. Index of Conference Board (Consum. Confidence диаграмма) dropped in May to 103.2 p. against 109.6 p. previous month. On 1 June ISM represent manufacturing report (ISM manuf. диаграмма ). Analyst forecasts manuf. index decrease to 55.6 from 57.3 in a previous month. Last meeting FED officials announced FOMC will make a decision depending on economic data. Futures on FED rate take into account 56% probability that FOMC will increase rate to 5.25% the 17 th time. On 22 May the probability was 60%.
JPY initially came under pressure after government reports on manufacturing and consumer spending that weaken expectations about rate next month in Japan. Besides, T. Fukui announced changes in monetary policy will depend on fundamental data and prices in country. According to official reports manufacturing has grown up 1.5%, that is high since November, however it is lower than average forecast +1.8%. Hosehold expenses fell 2% in April, exceeded forecast +1.4%.
Bears take situation on equity market under control. Investors warns that FOMC minutes on 10 May meeting can hint on further continuation of rate increase in USA. Corporate news: rating General Motors was downgraded by Deutsche Bank to "sell". Wal-Mart Stores also fell. Previously company announced the growth for gasoline in May brought about retail sales to low boundary of forecasted range. Sales results Wal-Mart and other great companies of retail trade were published on Thursday before the bell. On Monday, Kinder Morgan announced about intention to own company for $100 per share that is nearly on 18.5% higher than current cost. Bargain esteems in $13.4 billions.