money supply figure, which showes a sharp reduction over the previous year. M3 did put on speed in the middle of the year, but then ran put of steam, and it was this slowdown which prompted the Buba to make its move. Predicted M3 growth targets of 4 — 6% were not met. mainlv due to a slowdown in economic activity. The Buba statement maintained that the latest interest rate policy was intended to put money supply and the economy on a similar oath. Other contributory factors were low inflation	ju: 'due to to drift into recession a: to enhance л to under pin	— из-за - скатываться к снижению деловой активности - стимулировать  подпирать
and low potential for steep price rises and the continuing strength of the mark, whose protection is one of the Buba's main aims. The bank also painted a more optimistic picture of German economic potential than has been fashionable recently. and the president pointedly stated that he sees no grounds for the fear that Germany is drifting into recession. This rate cut served to underline his, and the bank's, view that economic frowth would be enhanced, not underpinned, by the cut. Analysts soeculate that a weakening of the economy or a collapse of the French currency, could force the Buba to act again and lower rates.

 

Comprehension Questions

1. What does the dealer have to study and select for forecasting?

2. What are chart patterns for?

3. Why did the greenback make forecasters shy for 1995?

4. What were the predictions for the end of 1995?

5. Was the continual downward trend over in 1995?

6. What brought dollar yields well above DM rates in December 1994?

7. When did the dollar break 1.42 DM on the upside?

8. How much did the US-Japanese trade deficit widen in June 1995? i     9. Did the dollar find the floor in August 1995?

 

 

 

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