European focus: USD continues rise before data on Retail sales. [M]

USD strengthened it’s positions against EUR and JPY after FED hinted that the process of rate raise is nit finished and that the USA Treasury did not begin to name China " the currency manipulator ". Treasury cancelled China from the list of “manipulators” on Wednesday.

«This fact says that USA governors do not pursue a policy of excessive weakling of dollar, believes Adrian Foster the currency strategist from Dresdner Kleinwort Wasserstein.

« Treasury’s report wasn’t so strict as expected and Federal Reserve left question about the rate politics opened for the next meeting, says Simon Derrick, chef currency strategist from Bank of New York. « There is no doubt that these facts are positive to USD.»

Remind that yesterday FOMC increased percent rate to 5% Federal Funds 25 years диаграмма Federal Funds 50 years диаграмма and in the accompanying application has been told, that in the future additional measures on toughening monetary policy can be demanded. " At present time future rate contracts show the possibility of rising rates up to 5.25% on the FOMC meeting in June what in 40%. At the beginning of previous week such possibility was 32%.

Alongside with technical factors there is a stimul for closing USD offers became expectation of strong data on retails which can strengthen fears of the further increase of interest rates.
According to the forecasts retail sales in April grew on 0.8% after 0.6% in previous Retail Sales (ex. auto) диаграмма. An indicator which is not considering sales of cars Retail Sales (ex. auto) диаграмма is expected at a level of 0.9 % which more than twice exceeds data of the last month.

« I suppose that consumer sector is now in better form that other think it is,» say Tim Mazanec, chef strategist from Boston Investors Bank & Trust Co.

Certificates of growth of consumption in a combination to growth of wages and decrease in unemployment to a lowest for last 5 years can force FED to continue process of increase rates as in the text of the yesterday's application it is marked, that further actions by FED " will depend more and more on economic data. " In this case the dollar can get the certain support.