The US dollar was decreasing the major part of the trading session on Tuesday amidst the lasting profit fixation together with the growth of the global stock indexes. However, after the beginning of the American session the situation changed greatly as the economic data from the USA having appointed at the favorable processes’ dynamics and got back the interest to the “greenback” which has neglected its losses against all majors and went into the offensive all over the “front”. The extra impact to the “bugs” purchases was provided with the information about the bank’s crediting rating decrease from the Emirate of Abu-Dhabi (Abu-Dhabi Commercial Bank) by the Moody’s Rating Agency. As a result the last daily session trading was completed in favor of the American currency. The Conference Board Research Group reported the consumer confidence index had grown up till 52.9 in December against 50.6 in November, as it had been informed before the November indicator head been at 49.5. The forecasts presumed the index’s increase till 53.0 in December. Some portion of optimism was supplied by the data of the dwelling prices in the USA. In accordance with the S&P Case-Shiller Report the housing prices index for 20 mega cities fell down in October for 7.3 per cent y/y that is significantly better than the September value when the annual comparison showed -9.4 per cent y/y. However, the data stayed without changes in general in monthly comparison, and that exactly challenges some anxieties in respect of probable demand’s increase cease. Nevertheless, the Tuesday statistics is quite able to take the chill off the predictions of possible scraping of the stimulation programs from the Federal Reserve System earlier than presupposed, and it would further support the dollar. According to the predictions the data going to be published today can spoil the mood in concerns of the “bugs” on the contrary. The PMI of Chicago is presumed to demonstrate less impressive dynamics in December and mark the level of 55.2 after 56.1; furthermore, the negative dynamics in the field of petrol and its products supplies being observed in the data lately can stipulate the petrol prices to increase and make pressure upon the dollar accordingly.
EUR
The common European currency noted at the highest possible level against the dollar almost for fortnight. The positive dynamics of the global stock markets together with the investors’ willing to fix the profit have stirred the interest to the euro. The European currency grew up at both the European and Asian sessions; the economic news from Germany having given the rise to diminish the apprehensions considering the EU deflation has provided a supplementary support to the euro. In accordance with the publicized data the consumer prices in Germany grew up for 0.9 per cent in December compared to November and for 0.8 per cent in comparison wit the same period of the previous year. The indicator’s growth appeared to be more significant than the analysts had expected as the prediction foresaw the prices growth for 0.6 per cent m/m and for 0.7 per cent y/y. Nevertheless, the totals of the day were not on the European currency, the sound data as for the US economy together with the news about the rating decrease for one of the largest banks of the Arabian Emirates have made a strong pressure upon the euro completing the day with minus to the dollar. The today information of the European economy macro indicators can afford some extra reason for disappointment concerning the euro. The M3 monetary set for November is presumed with a little growth per annum, for 0.4 per cent y/y after 0.3 per cent y/y in October and much less widening for 3 months, for 0.8 per cent after 1.6 per cent before. It can proclaim the ECB attempts to make the crediting in the Euro zone active don’t produce any desirable effect still yet; and it doesn’t inspire to sanguine hopes in concerns of EU economic recovery.
GBP
The British markets’ opening on Monday after the days-off started from the enforcement of the GB pound; though again the “bulls” efforts turned out to be unlucky at all ends as the sterling completed the day with the clear lost against the dollar and noted at the new local minimum in addition. No significant statistics as for the economy of the “Isles” was published, the data of the capacity of assets received by the households within the frame of mortgage loans though not invested into the housing market in the 3rd quarter were publicized only. The indicator amounted to -4.9 Billion of pounds – that speaks for the redeployment of funds by households for the mortgage loans repayment rather than for consumer expenses like it has been in the previous years and means the consumer’s grasp of his own expenses. Meanwhile, the dynamics of this indicator is positive as earlier, in the 2nd quarter it was -6.9 Billion of pound, and the forecast presumed -5.8 Billion. Besides, the Human Resources and Development Institute of Great Britain represented its own forecast of the unemployed capacity in 2010. It’s presupposed in the Institute the unemployment will reached its top amounting to 2.8 Million of people and grow further in the first half of next year. To say it simply the expectancies are far from being pinky. No economic news is expected from Great Britain today; the GB pound will stay under the influence of foreign data and first of all from the USA of course. It’s supposed no radical changes will be, the “bears” mood will stay predominant for the currency, and another stage of the ranging trade will be observed.
JPY
The Japanese yen continued its decrease against the dollar at the previous session, the news about the crediting rating lowering down of the Emirates’ bank brought to recollection to the investors the yen as a shelter-currency; though this process was short-termed, and summarizing it the currency of Japan completed the day at the new local minimums against the “bugs”. The negative mood as for the yen will obviously be kept at the market considering the deflation in the economy of this country spurs the investors to the confident predictions about the Bank of Japan’s keeping of velvet monetary-crediting terms for a long time – much longer than it’ll be observed in the USA. The statistics publicized today showed the business activity growth in the manufacturing in December, as the indicators rose to 53.8 against 52.3 point. This information will make no influence upon the market; though the technical factors can become a cause for the break in the “Land of Rising Sun” currency lowering down. The powerful resistance at 92.00/50 affords a rise for the expectance of the price consolidation within this range.
Analysis prepared by:
Arkady Nagiev
Forex4you analyst