The worries about the financial markets that China will continue to tighten monetary policy, which will cool the growth of Chinese economy and reduce demand for energy commodities in the country, the price of oil fell to its lowest level in two weeks. The crude oil prices fell heavily by 3% yesterday after Chinese Premier Wen Jiabao said the government develop measures to curb inflation in the second largest economy in the world, which is the largest user of energy resources. The prices of traded goods fell and fears of worsening debt crisis in the eurozone. Finance ministers from the European Union discussed in Brussels today’s debt crisis in Ireland, Portugal and Greece, as well as possibilities for a rescue package for banks in Ireland. The crude oil for cheaper despite the message of the American Petroleum Institute yesterday that reserves of U.S. crude oil fell last week to its fastest pace since September 2008 they fell by 7.7 million barrels, which was more than expected. Today and the weekly report released by the Ministry of Energy, U.S. oil reserves and demand for energy commodities last week which is more comprehensive because it covers all oil refineries in the country.
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The U.S. central bank began tightening cycle of monetary policy. This happened quite a surprise, since no signals were given prior to such intentions. Policy on withdrawal of money from the system began with an increase in the discount rate that commercial banks pay the Fed on its direct loans from the central bank. He was raised by a quarter percentage point to 0,75 percent. Among the reasons the central bank is that commercial banks must rely more heavily on money markets to raise the necessary funds, rather than resorting to the services of the Fed. These changes are considered as a step toward normalization of credit facilities the Fed,” says the official release of the institution. “No change is expected to lead to further tightening in financial conditions for households and businesses and they are not intended to signal a change in the outlook for the economy or monetary policy,” the Fed explained. After news of the dollar shot up sharply since the central bank’s actions are perceived by the market as a signal that is to tighten monetary policy. The dollar jumped to a level of 1,3485 EUR / USD, as at an earlier stage had reached a level of 1,3444 EUR / USD.
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