Weak start for euro and dollar

The ROL/EUR exchange rate fell 353 ROL in the first day of trading, reaching 39,310 ROL. The dollar shed 40 ROL yesterday, with the NBR assessing it at 29,027 ROL. The euro is 4.4% weaker than at the beginning of last year in nominal terms, while the dollar shed 11%. The forex market opened at 39,300/39,400 ROL/EUR, slightly lower than at the previous session’s close. The players bought foreign currency in the first part of the trading session, with rates rising to a peak of 39,530 ROL/EUR. Once this level was reached, the trend reversed and rates went gradually down prompted by sales of foreign currency. The market therefore closed at 39,220/39,270 ROL/EUR yesterday. “The traded volumes were those of a regular trading day. I am still expecting to see a nominal appreciation of the ROL. The exchange rate will see much heavier fluctuations, as the market reacts to rather low volumes. The foreign banks might come into play once April is over, so that volumes will grow, as will the volatility, because speculations will involve large amounts. The exchange rate could go down to 33,000-34,000 ROL/EUR by the end of the year, depending on NBR’s policy,” a dealer commented. Most players agree to the ROL continuing its appreciation in nominal terms throughout the year. “It is hard to say where the exchange rate will be in a year from now. We will probably go for a nominal appreciation. The exchange rate might go down to 33,000-35,000 ROL/EUR by the end of 2005,” another dealer said. ZF