Just how sustained this pick-up proves to be will become evident in the coming months when the extraordinary fiscal and monetary stimuli weaken. Foreign exchange markets Fluctuations in the US dollar dominated the foreign exchange markets. After having lost considerable ground during the first half of the year, the greenback rebounded slightly by October amid growing signs of an acceleration of growth. Recently, the focus of market participants returned to the sustainability of the US recovery and the continued rise in America’s current account deficit. As a result, the dollar weakened again (see graph 2). Since the middle of the year, the Swiss franc has moved sideways against the euro. Heavier fluctuations were recorded vis-à-vis the dollar. With positive economic data emanating in the US from June onwards, the franc initially weakened before firming again as part of the general dollar consolidation witnessed since September. On the whole, the Swiss franc hardly registered any independent movements. It depreciated strongly during the first half of the year after our interest rate decision and has remained stable since the summer. In relation both to Switzerland’s 24 major trading partners and to the euro zone, the real exchange rate index of the Swiss franc is now slightly below its level at the beginning of 1999, i.e. at the time of the euro launch. Gold market Owing to the more favourable economic situation, raw material prices continued the rise which had started in 2001.
So I’d like to begin by taking an opinion poll! I’d like to put to you two questions. The first is how many of you agree that monetary policy should have the control of inflation as its overriding objective? May I ask all those of you who agree that monetary policy should have control of inflation as its overriding objective, please, to raise a hand. Now please would those who disagree that monetary policy should have control of inflation as its overriding objective please raise a hand. Now let me ask you a second question - and I’m afraid that only those who voted in favour in response to the first question are entitled to vote this time - I don’t want a biased result. Given the objective of control of inflation - the 2½% inflation target - please would those of you who think interest rates should be higher than they are at present raise a hand? Please raise a hand now if you think interest rates are at the right level? And will those of you who think that interest rates should be lower than they are at present now please raise a hand - but remember you can only vote if you agreed that monetary policy should be directed to controlling inflation! Welcome to your first meeting of the Monetary Policy Committee! Your votes will all be individually recorded by the Chairman and published with the minutes in a fortnight’s time!