EURUSD. Decision of Bank of Canada about drop in rate by 0,25 % to 4,5 % supported dollar.
Today dollar rose at opening of the Asian markets and has continued growth at the European trading session. The decision of Bank of Canada to reduce the rate by 0,25 % to 4,5 % has supported the dollar greatly. This is the first decrease in the rate for last three years.
The decision of Bank of Canada was caused by attempt of protection of the manufacturers from the weakening dollar, as it is known the main commodity market for the Canadian manufacturers is the US market. Traders began to buy dollar actively after this news, as it can become a first sign in struggle against sharp dollar drop.
Canada - the first among G7 countries, which started to take measures to protect its own producers, Japan can follow its example. Every day Germany and France strengthen pressure upon the European central bank to make ECB heads to lower the basic interest rates, as the European manufacturers bear serious losses from hike of euro rate vs. dollar.
At the American session the dollar was supported after issue of data about production volume in the third quarter of this year. Labor productivity was up 6,3 %, that is 1,4 % above parameters of the second quarter and 0,5 % above expectations of the market.
Labor cost in the USA went down in the third quarter 2007 by 2,0% in annual calculation, against decrease by 0,2% according to preliminary data of the Labor Department.
Analysts forecast slide of labor cost by 1,0%.
The size of a hourly payment grew in the third quarter by 4,2% instead of 4,7% according to earlier published data.
Data about activity in crediting market became good news for dollar. According to Reuters agency: the index of mortgage applications in the USA grew last week, the Association of mortgage banks informed on Wednesday.
Seasonally adjusted Mortgage Bankers Association Index for a week which ended on November, 30th, increased by 22,5% up to 791,8 points.
Cost of 30-years mortgage credits with the fixed rate dipped by 27 basic points to 5,82%.
As a whole the dollar continues to hold its positions near a level 1,46. Large players do not hurry up to open long-term positions expecting key data this week - the US employment data, which are published on Friday. The market expects decrease in payrolls in November in comparison with October. In the given situation any parameters on a labor market above market expectations will support dollar.
While it is better to remain outside the market and to follow a current situation.