The American currency continued its decrease against its main “opponents” on Monday trading as well. Obviously, the “bubs” of the final day at the former week caused by the unfavorable data as for the US labor market December got back to the market the computations connected to the low profitability of the “bugs” and raised the risks inclination to the high level. These presuppositions are confirmed with the growth of the gold, petrol, and European securities’ prices having been observed at the European session. The supplement was provided by the positive economic data from China as well. Quite possibly, the market returns to the strategy based upon the sales of the “greenback” at the publication of favorable for the global economy information amidst the significantly decreased probability of the stiffening of the monetary-crediting policy in the USA. The announcement of the Fitch Rating Agency that proved the US sovereign rating at the level of AAA and stated that there was no threaten for the US dollar’s status as the global reserve currency hasn’t intruded into the current state of affairs and was ignored by the market. No significant data concerning the US economy was published on Monday. Not many fundamental indicators are going to be represented today as well: the US foreign trading balance’s total will be published; the forecast presumes the deficit increase to -34.9 Billion in November from -32.9 Billion of dollar. Furthermore, the economic sentiment index form IBD/TIPP for January will be publicized, the previous period has demonstrated 46.8. However, as it seems just not these data may become the influencing factors at the market on Tuesday – the accountant reports’ period of the American companies is starting for the 4th quarter, and the Alcoa will be the fist one for representing results – the analysts predict good totals, and if it’s so the currency market may get the checkpoints for the midterm period.
EUR
The profitability of the common European currency determined an increased interest to it on Monday trades. The euro enforced against all the “majors” and as for the dollar it got back to the levels where it was trades in the middle of the previous month last year, to 1.4650/60. Nevertheless, the attitude of the market is quite skeptic as for the growth of the Euro zone currency. The budgeting problems of some countries within the block and the data of the unemployment level published last week, which has already got two-digit figures – 10.0 per cent – say in favor of the fact that the European affairs seem not to be better that in the USA and that is why the growth of the common currency will most likely be limited. There were no significant macro economic data published on Monday, the appearance of the Head of ECB J.-K. Triche at the meeting dedicated to the global economy affairs hasn’t contained anything that might induce an elevated activity at the market. The President of the European CB has focused his attention on the “sore subject” having announced that the governments of the countries in the world need to turn on the issue of extremely great budgeting deficits. The news set of today is also empty – the EU economic data aren’t expected, the euro will stay under the influence of the mood existed at the market and also the foreign information.
GBP
The British pound hasn’t made exclusion and increased a bit against the dollar on Monday. Beside the unfavorable for the dollar market’s mood some support to the British currency has possibly been provided by the data of the prices’ growth on the “Isles” (PPI) published last week and encouraged to the expectances of the rates’ increase. Meanwhile, the “cable” achievements were much less modest than the euro’s ones as the presuppositions as for the policy stiffening in Great Britain in the current state of affairs both in the economy and the budget of the country are too bold. Furthermore, the troubles of the political nature are lowering the interest to the GB pound much. As like as not, the support to the US dollar was provided in the second half of the day by the announcement of the President of the FRS of Atlanta D. Lochheart about the necessity of the refusal of super velvet monetary-crediting policy from the side of FRS this year. No macro statistics as for the British economy was published, but the news of set has a lot of significant information. The data of the prices at the housing market from DCLG for November will be represented, where the growth is presumed to be watched to 4.0 per cent y/y after -2.2 per cent y/y before, and also the data of the foreign trading results for November: here the analysts predict the trading balance deficit’s decrease. The data have already been announced stated that the balance of the dwelling prices according to the RICS report decreased in December to 30 per cent after 35 per cent; the retailing grew up significantly, to 4.2 per cent y/y from 1.2 per cent y/y – generally speaking, that isn’t surprising much if taking into account the Christmas holidays. Nevertheless, the G pound continues to lose that was won on Monday, and this tendency is quite possible to continue.
JPY
The change of the rhetoric in the new-appointed Minister of Finances of Japan N. Khan has provided the support for the yen. However, not only this fact, as it seems, was the cause for the yens’ increase as the purchases from the side of the exporters and the profit fixation after the significant growth of the pair of USD/JPY has also supported the Japanese currency. The data of the economy of the country published today already have represented the less encouraging situation as the payment balance’s total shortened to 1.30 Trillion of yen from 1.38 Trillion during November; the banking crediting decreased in December and demonstrated -1.0 per cent y/y from 0.2 per cent y/y, that certainly has made an influence upon the money supply whereas the M2 monetary aggregate narrowed till 3.1 per cent y/y from 3.3 per cent y/y, and M3 – till 2.2 per cent from 2.4 per cent. The statistics as for the money supply may obviously set minds on the opinion that BoJ will have to increase the capacities of the quantitative softening programs and that exactly will turn back the pressure upon the yen in the shortest possible time.
Analysis prepared by:
Arkady Nagiev
Forex4you analyst
