The launch of the program of purchases of loans of State by the US Federal Reserve (Fed) has not caused the fall of the dollar that some had feared. The dollar plunged while just after the Fed announcement, on March 18 signing elsewhere its largest decrease since 1985 but a month later, the decline is moderated. The effective exchange rate of the dollar, reflecting the evolution of the US dollar against a basket of currencies, assigned 2. He was 85,14 yesterday. The decline against the euro is still less pronounced: the single currency has increased from 1.29 dollar 1.3198 yesterday, on March 17 end of the day.
The monetization of debt, via the purchase of securities by the Central Bank, is negative for a currency, insofar as it has an inflationary purpose. To the risk of weakening of the greenback, China, first holder of dollar-denominated debt is also mounted to the niche.
Clearly, the "quantitative easing" the Fed is not enough to distract investors from the reserve and international transaction currency. "The dollar essentially dependent on rest of the sense of the market risk, said Carole Laulhère, in Société Générale. But foreign exchange dealers are moving back to reality, after the euphoria about the G20 Summit and the plan of purchasing toxic assets in the United States. "According to the strategist, uncertainties about the situation recur, including after sales disappointing retail or industrial production, unveiled yesterday in the United States. The content of the quarterly results also raises questions, while the season has just started. The dollar is benefiting from this climate.
Next the ECB decisions
The lure of the dollar was confirmed yesterday by the publication of the flow of foreign investments in US securities. The balance between purchases and sales of securities became positive in February. Net purchases of bonds and long term actions reached $ 22 billion. This figure exceeds expectations and also erases the fears generated by the January report, which highlighted a negative balance, or net sales denominated in dollar by foreigners. "A new sign of weakness in investment portfolio in the United States could reflect concerns about the financing of the current account deficit," warned the DresdnerCommerzbank team prior to publication of data. "It is also true that market operators are currently more tolerant in this regard", added the strategists.
Yesterday, the greenback has appreciated for the second session in a row against the euro. The single currency is itself weakened because of the uncertainties of the future decisions of the European Central Bank. The Frankfurt Institute must render its verdict on interest rates and possible non-conventional measures may 7. The debate is raging within the financial community. Operators are wondering if the ECB will lower the rent of money below 1 by summer. Axel Weber, a prominent member of the institution, indicated that there was not favourable. Bank of America - Merrill Lynch team also believes that the refinancing operations fixed rate with a guarantee of response to all requests for banks will be extended to 12 months loans. According to her, the ECB will also launch in purchases of debts of enterprises.
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