Forex. Tuesday results [E]

Dollar will continue to grow versus basic currencies.
The euro declined against the dollar after a report showed investor confidence in Germany decreased to its lowest since July prior year. The report of economic expectations ZEW said index fell more than analysts expected in June. Index is falling for a six consecutive months.
By the way, separate report showed CPI growth in Germany slowed down in comparison with prior month, owning to significant weakening of price pressure outside of energy sector.
The harmonized Germany CPI calculated in view of EU standards, completely justified analystsтАЩ forecasts.
In Britain CPI exceeded in May a target level 2.0% established by BOE.
The dollar renewed growth against the basic currencies after the publication of inflationary data which activated speculations on continuation of the U.S. Fed interest rates increase.
As Labor Department informed, PPI which excludes food and energy has grown on 0.3% more, than analysts assumed.
The report today validated the Fed's concerns about inflation,said Richard Franulovich, leading currency strategist of New-York representation Westpac Banking Corp.
The Fed has to raise interest rates to contain that, it will support the dollar, - thinks analysts.
Futures market in the recent time on 90% considers probability of Interest rate increase on a quarter of percentage point to 5.25% in this month.
Other government report has fixed the slowdown of retail sales in May to 0.1% in comparison with 0.5% in April. Nevertheless, the index which excludes auto sales appeared at the level of expectations 0.5% after growth at 0.8% month earlier.
This fact showed that despite some cooling, consumer activity in the USA remains on the high level.

EUR/USD after news from Germany try to punch support, but it could not. The rate consolidated in a range $1.2870/1.2600. After the U.S. news a slowdown continued and the euro tested support $1.2520. Recoil has not followed. Day closed at $1.2541.
GBP/USD after testing support on $1.8390 climbed in area $1.8450/60. Offers led to recoil in $1.8420. After that the rate was stabilized in a narrow range $1.8420/40. Then the rate decrease proceeded as a result the rate lifted to $1.8320. Strong recoil, as well as for the euro, has not followed. Day closed on $1.8340.
USD/JPY remain in a range Y114.30/70 for over the day.

Then the rate rose to Y115.40. After unsuccessful effort of this level overcoming the rate decreased to Y115.30 in which the trades closed.
Futures market in the recent time on 90% considers probability of Interest rate increase on a quarter of percentage point to 5.25% in the end of month.
On Monday similar possibility was 84%, and two weeks ago didnтАЩt exceed 72%.
Considering general concern in inflation problem this instability likely will maintain before the CPI publication on Wednesday, before FOMC meeting inflationary report, which allow to predict more confidently how will develop events on currency market in the recent time.