The first half of the trades on Monday demonstrated opinion preservation of the previous week end – the US dollar continued to enforce itself against the Europeans. Its quite possible the opinion started to strike the Employment Report represented on Friday and being much better than the forecasts displays itself the first sign of reverse in the economic situation in the States; therefore there’re the reasons to revise the correlation, when the more positive information raised the level of willing to risk and pressed upon the American currency rather than increasing its interest. Such a development of the events was naturally dictated by the appearance of expectations FRS may start stiffening of its policy earlier than it was expected. However, the appearances of the Head of FRS B. Bernanckey taking its place on Monday during the American session disappointed such expectations as testified in favors of the State regulator will keep its monetary-crediting policy without any changes. Most likely it didn’t impress the participants of the market as didn’t justify their hopes. The dollar began to fall down against the euro and the GB pound and as for the yen – continued its falling. As a result the "bugs" lost the biggest part of the positions that had been conquered earlier, although fixed the profit to the euro, not big but minus was fixed to the GB pound. In counterblows with the yen, the session on Monday ended with the losses of the dollar. There were not much news as for the States economy on Monday, the Conference Board denoted that the tendency in the employment of the USA in November improved the fourth month running, the employment tendencies’ index increased to 90.8 in comparison with 89.2 in October that realized some supplement to Friday’s positive. Besides, the data about the consumer crediting were represented; the statistics denoted the dynamics’ improvement; the September data were revised to the better side, from -14.8 Billion of dollar till -8.8 Billion; and the October data became better than the forecasts although demonstrated the negative result, actual -3.5 Billion of dollar at expected -9.3 Billion. No significant news as for the State economy is planned for today and the driver of the market opinions may be auctions for the placement of the state bonds having started today and will continue to Thursday until. The weak demand for the "TBs" may push up the long term rates in the USA that lowered in its turn the optimism as for the perspectives of the American economy and became the negative concerning the dollar. Generally speaking in order to keep at the market the opinion just appeared, and the dollar may continue to growth keeping leader positions, the additional confirmations are necessary for steadiness of the economic recovery. The market will obviously be more attentive to the macro statistics going to be present this week searching these very confirmations or vice versa the refutations. In that perspective a great significance appears with the news being represented later on the current week, and any improvement of the indexes may become a good reason for increasing the interest to the "greenback".
EUR
The common European currency decreased against the dollar on Monday trades. It should be noticed the investors’ attitude to the euro at the first session of the already begun week was less confident than as for the other majors. The euro sales-outs were more massive and the purchases of it – less in volume amidst the declarations of B. Bernankey. It can’t be excluded the cause for it became to some degree the data of the Euro zone economy represented on Monday. The manufacturing orders in Germany lowered down in October for 2.1 per cent m/m; in the annual comparison the orders fell down for 8.5 per cent y/y. At that the forecasts expected the representation of more optimistic picture of the growth for 0.8 per cent m/m and till -6.2 per cent y/y. One of the most important causes of orders’ curtailing is called the foreign demand downfall; the exporting orders shortened for 3.5 per cent – that exactly can mean the negative influence of the powerful euro. This question isn’t new and it was voiced once again on Monday by the head of Belgium CB G. Kaden who announced “If the euro rate rises significantly it won’t be favorable for the economic growth in the Europe”. The rhetoric of such a kind was quite able to caution the traders and to enforce the mistrust to this currency of the European block. The speech of the President of the Central European Bank J.-C. Triche has never brought any new information. The Head of ECB declared on Monday the current level of the rates in the Euro zone corresponded to the terms and conditions; the CB of the Europe would continue to support the banking system as it would be demanded by the current situation and as far as the economic situation was improving the bank would be gradually neglecting its special support program. In other words, the usual kicked around rhetoric concerning nothing able to support the euro either on the contrary to press upon the European currency. The news set as for the Euro zone going to appear today is likely to the previous one modest for the content. The data of the manufacturing in Germany for October will be represented; the forecast presuppose the growth per month for 1.0 per cent m/m and decrease for 10.2 per cent per annum. In September more flexible dynamics was observed as monthly +2.7 per cent m/m but less convincing recovering tempos annually -12.9 per cent y/y. Summarizing it the data can obviously be taken as positive if, of course, unlike the forecasts of the manufacturing orders the expectancies will be confirmed.
GBP
The GB pound fixed a little plus against the dollar summarizing the Monday session; but the beginning of the trades was on the sterling’s decrease. The mood of the previous Friday has further kept the market in the special interest to the dollar. Later the speech of B. Bernankey has alternated the market’s attitude to the States’ currency as it decreased the anxieties just appeared as for respectively rapid stiffening of the monetary-crediting policy of the USA to great degree. The GB pound has returned its positions lost in the first half of the session and stayed in plus against the “greenback”. No economic news from Great Britain was published; some support to the sterling was possibly made by the appearance of the Minister of Finances A. Darling having stated the British economy found itself in a better state of affairs than it was six months ago. Generally speaking, the market is looking forward for Pre-Budgeting Report of the state authorities of the “Isles”, and this very expectance can provoke the ambiguity and vigilance from the side of the investors in concerns of the sterling as the state of affairs as for the state finances of Great Britain is challenging enough. The data having already been published today demonstrated the lowering down of the retailing balance in November; in accordance with the British Retailing Consortium Report (BRC) the indicator amounted 1.8 per cent y/y against 3.8 per cent y/y before. Later on the information about the manufacturing for November will be represented; the growth is suggested to be observed monthly for 0.5 per cent m/m and the decrease per annum -7.2 per cent y/y. However, it should be mentioned the annual decrease retarded distinctly. The situation as for the sterling is questionable; and the “cable” is most likely to be traded in the nearest time within the range until the new trading checkpoints are received as they can come from either the Ministry of Finances of the “Isles” (the Pre-Budgeting Report) or BoE (the meeting in concerns of the rates).
JPY
The dollar decreased against the Japanese yen on Monday summarizing the daily trading. The downfall was reasoned with the profits fixation by the Japanese exporters after the rapid growth of the American currency on Friday. Besides, some portion of the sales-outs was as like as not accomplished c in the appearance of coming book-keeping records making-up at the end of December. The information about the economic data of Japan has been published today showing the payment balance surplus decrease for October till 1397.6 Billion of yen from 1570 Billion of yen; though the increase of the positive total as for the trading balance, 949.0 Billion of yen after 599.2 Billion of yen before. Besides, both advancing and coinciding indexes were remarked with growth in October; though the economic situation forecast for November has appeared with the significant decrease in comparison with the previous values and forecasts 33.0, after 40.9 and by forecasted 40.0. Quite nice result of the foreign trade is possibly further supporting the Japanese currency still staying in the ascending movement against the dollar at the current session as well; though as it seems it’s connected rather to the stock market’s default, and the yen is again attractive as a shelter-currency. Nevertheless, as it seems in the nearest possible time the yen will be decreasing again as the anxieties of the intervention and the technical factors will renew the pressure upon the currency of the “Land of the Rising Sun”
Analysis prepared by:
Arkady Nagiev
Forex4you analyst
