The dollar purchases against the Europeans lasted on Wednesday session – though, it should be mentioned much less decisive than in the first two days of the week. Moreover, some part of the trading the canny enforcement of the investors’ inclination to risks was observed; and the “greenback” was under the pressure. However, it was most likely happening in the process of the hackneyed profits fixation at that short running as the “bugs” enforcement recovered rapidly. Nevertheless, the euro could complete the session with the “profit” to the dollar amidst the uplift the US stock market till the end of the session anyway. Concerning the yen the dollar has ever stayed under the pressure due to the serious escalation of apprehensions the like troubles would be faced by Spain as well as Standard & Poor’s had lowered the forecast for this very country. The extra argument to the decrease of the optimistic tunes at the market became the Pre-Budgeting Report of the Ministry of Finances of Great Britain having disappointed the investors; and the Dubai shares continued to cheapen on Wednesday recalling the foundation troubles hadn’t still been solved yet. The economic data published on Wednesday demonstrated the growth of the commodity stock in the US wholesaling. The commodities grew up in October for 0.3 per cent m/m – it became just a sudden surprise as it was presupposed to watch curtail for 0.6 per cent m/m. The raise of the commodity stock was found to be the first case starting from August 2008 and it can probably be taken as one of the factors confirming the economic recovery and giving the ground for the expectations for the further enlargement both of the orders and the manufacturing. The information about the shortage of the petrol supplies in the USA has made no influence upon the market. The macro statistics of the current day is going to be represented with the trading balance results for October where a little deficit growth is expected, till -37.0 Billion of dollar from -36.5 Billion of dollar; and also with the capacity of the redundant payment appeals for the previous week which by forecast has increased a bit and ca amount to 460 thousand while the previous indicator fixed 457 thousand. Besides, the information as for the Federal Budget for November is also expected; this case the deficit’s curtail can be represented to 134.0 Billion of dollar after -176.4 Billion of dollar. It mustn’t suggest this very information can interfere in the market events’ development as the mood’s driver will still stay the political component – as it seems this one exactly is still staying foreshorten provoking the risks inclination’s decrease.

EUR
   The market’s attitude to the common currency has still stayed awaken. After the notice of the fluctuating situation in Greece, another European state – Spain has got a warning about the possible rating lowering. This very information has given a ground for some extra escalation of the apprehensions concerning the Euro zone stability. The common currency found itself under the pressure against the dollar for the major part of Wednesday session, though till the end of the trading it could fix the plus as for the opening prices anyway. The prices growth at the US stock market has supported the euro increasing up to the moment the willing to risk. The EU economic news were represented with the data about Germany; the trading balance surplus increased in November till 13.6 Billion of euro from 9.9 Billion., and the payment balance surplus for October grew up to 11.0 Billion from 9.4 Billion. It appeared to be better than forecasted and supported the euro for some time as the cause of the positive dynamics became the export growth, what in its turn fed hopes for the start of the recovery process in the European largest economy. Besides, the information concerning the consumer inflation was published; the November consumer prices index was found better than expected due to the final evaluation, -0.1 per cent m/m and +0.4 per cent y/y; the preliminary data were fixing the downfall for 0.2 per cent m/m and the raise for 0.3 per cent y/y; and the forecasts expected for no alternations; the harmonized index confirmed +0.4 per cent. The news planned to be published at the session of today will represent the level of the wholesales prices in Germany in November; it’s presupposed the prices grew up for 0.3 per cent m/m after the decrease for 0.4 per cent in October. If this forecast is confirmed the arguments to suppose the alternation of the demand to the positive side will appear; that can certainly be accepted as the positive factor. Meanwhile, the most important factor of influence at the market will still stay the risks inclination level which will be defined with the political news.

GBP
The British pound finished Wednesday session with another minus against the dollar, the expectancies as for the Pre-Budgeting Report and the appearance of this document itself haven’t supported the sterling. The special pressure on the “cable” was denoted when the Minister of Finances A. Darling told that the new tax for bonuses of the banks employees would be implemented i.e., to avoid political component, what was the Minister’s dream became impossible. Besides, the Moody’s Rating Agency announced the Pre-Budgeting Report represented in Great Britain didn’t change the estimation for this state which is inclined to the negative forecast. To say it English the plans of the British Government represented in the report as for the shortening of the budgeting deficit don’t bring necessary parameters and neither convince the level of the budgeting deficit essential for the state crediting rating saving at the AAA-level will attain in the closest future. The economy hasn’t still got such level of recovery whereat it’s possible to shorten the expenses and increase the taxes significantly; and such a situation approaches Britain to the rating decrease and considerably provides the negative influence upon the GB pound. The statistics published at the previous session demonstrated the unexpected increase of the state trading balance deficit, the negative totals increased in October to 7.1 Billion of pound against the deficit amounted 6.9 Billion in September; the analysts expected the shortening. As appeared the import increased more significantly than the export; the general volume of the export increased in October from 0.9 Billion of pound till 20.4 Billion of pound and the import from 1.1 Billion of pound till 27.5 Billion at that the processes of the foreign trades didn’t denoted with the positive dynamics. Today session gives the information as for the perspectives in the monetary-crediting policy of Great Britain for the time immediately ahead, the decisions of the Bank of England as for the rates and for the changes in the quantitative softening programs will be represented. As presupposed there will be no changes; the Bank of England policy continues to stay soft, and the Pre-Budgeting Report added more arguments to such a position of the regulator will be kept longer than expected before. Obviously such a situation won’t support the sterling and the British currency will continue to fall down.

JPY
   The yen continued its enforcement at the previous session. The fussiness being preserved at the market after the Fitch Rating Agency had lowered the crediting rating of Greece and the securities of the Dubai Emirate continued to cheapen on Wednesday as well have together increased the yen status as the most assured shelter-asset and caused the Japanese currency’s purchases against all majors. Though it should also be mentioned the “bulls” activity as for the yen was weaker than earlier as the clear willing of the investors to fix the profit among the open positions after the impressive enforcement of the yen was observed. The revision to the side of decrease of GDP of Japan for the 3rd quarter has also supported the interest to the currency of Japan as the willing to risk of the Japanese investors to open the risky positions abroad has also lowered. The economic statistics of the “Land of Rising Sun” already published today demonstrated the orders for the Japanese manufacturing equipment fell down in October again giving the grounds for predictions the recovery process hasn’t still winded itself enough for the investments increase. The orders lowered for 4.5 per cent in October against the September uplift for 10.5 per cent though the analysts have already presupposed the decrease although for 4.4 per cent only. Besides, the November prices for the corporative goods were represented, the November index rose a bit and showed -4.9 per cent y/y against -6.7 per cent y/y that exactly can be encountered to positive with the hopes on the deflation processes retardation. Concerning the nearest perspectives for the yen the profit fixation will possibly last and it’ll weaken the Japanese currency for a short period of time. However, the total mood of the escape of risks which will most likely preserve at the market say for the possible prolongation of this shelter-asset enforcement.

Analysis prepared by:

Arkady Nagiev
Forex4you analyst