The pressure upon the US dollar continued at the session on Wednesday as well, though the only succeeding in it was the GB pound amidst the announcements of the representatives of BoE concerning the emerging necessity tot stiffen the fiscal policy; the common currency was satisfied with less success due to the splash of the craze in concerns of the troubles in Greece and some other EU countries. The currency of Japan ceased its enforcement and fixed the minus against the dollar amidst the improvement of the attitudes to risks and probably in respect of the profit fixation. The FRS report “The Beige Book”, which was reliant to as for the support of the rates’ increase expectations in the USA hasn’t lived up to the aspirations as it was run about the improvement of the economic situation; though the problems in the housing sector and at the commercial estates market were stated. At the same time there were no hints on the steps of the US regulator in the direction of the rates uplift, that’s why no response was observed at the market up to the moment. Some extra support the dollar was provided by the data of the petrol and its products supplies; however, this process was galloping and didn’t change the general state of affairs. The news set of the current session contains very essential information – first of all it’s the data of the retailing in the USA for December: the forecasts presume the growth for 0.4 per cent to be shown that’s worse than the previous result when it was +1.3 per cent. Furthermore, the data of both the number of the redundant payment appeals and the commercial supplies will be in the focus of the attention. As expected the redundant payment appeals have still stayed at the previous level of 434 thousand, and the commercial supplies grew up a bit, for 0.2 per cent summarizing November and that can be set off under the belt of the American economy. This statistics has unlikely changed the market’s alignment as the efficient correctives may be due to either extremely good, or contrarily, very bad retailing data.
EUR
The attempts of the common currency as for the further growth against the dollar were interrupted after the market’s remind about the troubles in Greece and some other EU countries. Summarizing the day the common currency has fixed the plus to the dollar though less impressive than it could be if remember the living purchases of the euro at the beginning of the Wednesday session. The pressure upon the European currency was also made by the stock indexes’ fluctuation at the European venues. No significant statistics was published, and concerning the general news the doubts as for sufficient economic growth in Germany can be fetched out it was declared by one of the head advisors of the state government P. Boefinger. As the analysts supposes the growth of GDP in 2010 will not overpass 2 per cent, and of the cause for it is the increasing unemployment. Moreover, in this context it would be nice to recall the favorable information as for the labor market in Germany having been published recently and firm up the competence of the doubts concerning the data’s credibility. The main event of the day for the euro and the market in general will be the information from ECB about the results of its meeting where the fate of the monetary-crediting policy in the Euro zone was sealed. In accordance with the forecasts the European Central Bank will keep the instrument (the rates) and the capacity of the liquidities’ increase program without alternations. No sudden surprises are also expected from the side of the President of ECB J.-C. Triche as well; nevertheless, the investors’ attention will surely be attracted to this very event as the hard declarations may appear concerning the necessity to concern the provision of the state finances’ stability from the side of the state authorities of the countries within the block.
GBP
The British pound increased against the dollar more than other majors on Wednesday trading. The leadership positions were provided to the sterling by the announcements of the member of the Committee for Monetary-Crediting Policy of the Bank of England E. Saintance about the approach of that moment when the Central Bank will have to make a break in the accomplishment of the quantitative softening program. In his own opinion the Bank of England will cease the purchase of the bonds and evaluate the influence of these purchases upon the economy. The aftermaths of this rhetoric were very distinct at the market where the “cable” was increasing during the whole session in fact. As for the economy of the “Isles” the November data of the manufacturing in Great Britain were published. The indicator has demonstrated the growth for 0.4 per cent m/mm whereas expected +0.2 per cent m/m and it was fixed the decrease for 0.1 per cent m/m in October. However, the production in the processing sector was kept at the previous level in November, 0.0 per cent, but in the annual calculation the decrease made 5.4 per cent while the forecasts expected a little growth in the monthly dynamics. The absence of the growth in the mentioned sector of industry can be appreciated as an alarm signal as the perspectives can be less favorable for the uplift in respect of the scrape as for the stimulating programs and especially of the probable tax harden. No significant statistics is expected from Great Britain today, the GB pound will be further kept under the influence of the foreign information – the news about the consumer demand from the United States based upon the retailing data and the ECB decision.
JPY
The Japanese currency interrupted its increase against the US dollar at the session on Wednesday. Obviously, it’s high time for the investors to fix the profit and not bad background for the before mentioned was provided by the commentaries of the FRS representatives – the President of the Federal Reserve Bank in Philadelphia Ch. Plosser and the President of FRB in Dallas R. Fisher. The announcements of these functionaries touched upon the necessity of the rates’ increase that in its turn has instigated the purchases of the dollar from the side of the Asian hedge-funds and initiated the increase of the pair of USD/JPY. The data of the Japanese economy published today have determined the maintenance of the problems as the machine-building production orders index crushed down for -11.3 per cent m/m in November after -4.5 per cent m/m in October. However, some positive dynamics was observed in the wholesales’ prices, the December corporative goods prices’ index retarded its decrease and showed -3.9 per cent y/y after -4.9 per cent y/y and that encourages optimism in the deflation period being observed in the country. As for the nearest prospects for the yen the market mod seems to be maintained, and the currency of Japan will further be kept under the pressure if certainly, no event happens amidst which the investors’ risks inclination falls down.
Analysis prepared by:
Arkady Nagiev
Forex4you analyst
