Large turnover at the fx market in the Republic of Macedonia, reduced unemployment rate in the USA, over- indebted Italy – new problem in the EU

Author: Borce Stamenkovski

Foreign exchange market remains on its high level. In the total traffic, Euro currency participate with almost 81 %, the American dollar with 13 %, while the rest currencies are in total around  6 % from the entire foreign exchange market.

On average in October there were traded 35, 9 million EUR on a daily basis. Exchange offices and the real sector offers reach its highest level; the demand was reduced, while the large companies as result of the season motives have reduced their purchasing. The situation in the segment of the commercial banks was following: NLB Banka, Komercijalna Banka, Sparkasse Banka, Ohridska Banka were at the offer side (eur/ dol.), while Prokredit Banka and Halk Banka were among the buyers with reduced amounts. Trade currency among banks was in tight range, around 61, 47 – 61, 48. At the end of the month there were notable increased activities among the commercial banks. That was done with aim to “press” the open foreign currency position, which in returns influenced the rate of the capital adequacy.

On the international plan there was published information for unemployment rate in the USA. Despite the expectations of 3, 80 % the unemployment rate was reduced and was estimated at 3, 70 %. GDP growth for 2018 according to the newest projections was estimated to be 3, 10 % and in comparison with the projections from June was higher, because the expectations were GDP growth of 2,80 %. On its September meeting FED has increased the basic point and now they are estimated at 2, 25 % on annual level, while it is expected to be 2, 40 % till the end of the year. Governor Yellen has announced such estimations at the end of the 2017 and they are on its highest level since 2008. Thus such numbers become reality. At the FED meeting in September the governor Jerome Walker gave the signal for new round of interest rate increase in 2019 and interest rate in the following year could reach 3,10 %.

In Europe, the situation with the increased Italian national debt is the main generator of the EURO price. The Italian government proposed increased budget expenditures for the following year in aim to initiate increased economy growth. By that the national debt will be increased, so currently it is 130 % from the GDP, and according to the European Union rules it shouldn’t be above 60 % from GDP. Italy is facing reduction of its credit rating from the rating agencies. By those large sales of their securities on the international level is expected and in the meantime in front of the European Commission Italy should explain its own proposed budget for the following year, but it should be also rejected.

 

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