The absence of significant news both from the United States and Europe conditioned enough sluggish trades in the first day of the started weekly session. The US dollar resided under some pressure of the European currencies the greater part of the trading day; nevertheless, the results appeared to be neutral aslope the preferences in favor of the “buck”. Obviously, the investors again fixed the profit after the confident enforcement of the “greenback”' last week. Besides, nothing special appeared from the Europe on Monday, what may strengthen the relevant anxieties as for the budgets of the Euro zone countries. The G7 summit of the Ministers of Finances in Canada last weekend finished with nothing, and most likely disappointed the market. The Conference Board represented on Monday the data about the tendency in the employment area in the USA for January. This indicator demonstrated the growth fifth month running. The employment tendencies index grew up to 93.2 in comparison with 92.3 in December. The commentaries accompanying the data publication denoted that lasting growth of the index increased the optimism in concerns of the employment market perspectives in the 1st quarter of the current year. The news set as for the USA going to be represented today doesn’t have much information. The following will be published: wholesale inventories in December, which are expected with the growth, though less impressionable than before, for 0.5 per cent, after +1.5 per cent in November, and economic sentiment index after IBD/TIPP in February, where it’s expected to see the growth from 48.8 till 49.3. Such statistics won’t encourage the market to any activity. The US dollar will be under the influence of the foreign information and it may quite possibly become under the pressure again. At the same time, as it seems, much more probability possess the estimates about the ranging trades.
EUR
The euro was increasing against the US dollar on Monday; though it completed the day next to the opening prices. The absence of the information strengthening the apprehensions as for Greece and some other countries of the Euro zone has obviously encouraged the investors to a little enlargement of the willing to risk against the raise of the stock markets both of the Europe and the USA and also the efforts to increase the gold prices. Alongside to this relatively flat situation, the investors have most likely decided to fix the profit after the impressive downfall of the European currency last week. No economic news as for the Euro zone was published. The investors’ confidence index for January was represented only. It has defaulted to -8.2 from -3.7 having estimated the mood as for the euro assets. The news set for today will be represented with the data of Germany. The foreign trading surplus is expected to curtail in December to 14.6 Billion from 17.2 Billion of euro before; at that due to the growth of import and export’s shortage, what in its turn may be considered as a negative tendency for the country with the export-oriented economy. The payment balance is presumed to be seen with the growth of the positive totals at the same time. The précised consumer prices index for January will be also announced. No changes are expected thereby. The indicator will stay at -0.6 per cent m/m and 0.8 per cent y/y. This news is supposed to make no corrections for the market mood. The debts troubles of Greece and some other countries, such as Spain and Portugal, will further be kept as the predominant issues at the currency market, and the euro will come back under the pressure. However, the profit fixation may continue for some time, and that may cause the further development of the lateral consolidation being observed now at the pair of EUR/USD.
GBP
The GB pound made an effort to enforce itself against the US dollar at Monday trading with a very impermanent success. However, the closing prices have still resided within the negative sector having fixed a minus against the “buck” though a little one. Obviously, the tensions determined with such British troubles as taxation-budgeting and political continue to be at a high level and suppress the confidence in concerns of the sterling. The high probability of Great Britain’s joining such problematic countries as Greece and Spain by reason of high level of the budgeting deficit rejects the investors out of the “cable”. Still yet the main rating agencies have confirmed the British crediting status at the level of AAA, though it maintains the circumspect attitude to the GB pound amidst the circle of troubles determined by the parliament elections with the possible result of no majority. No economic news as for the “Isles” was published. Today the December data of foreign trading will be represented. The trading balance deficit is expected to shorten a little, to -7.1 Billion from -7.18 Billion of pound. The data having already been published today demonstrated the mood’s decrease in the retailing. The BRC retailing monitoring fixed -0.7 per cent y/y in January after it had been 4.2 per cent y/y before. That has become the first decrease for last 5 months. Meanwhile, the home prices balance according to RICS has fixed another increase to 32 per cent from 30 per cent, while the decrease was expected to 28 per cent. Most likely, the absence of new checkpoints together with the weak news background of the already started session may determine the lasting of the consolidating movement at the pair of GBP/USD with the splashes of the “bulls” willing to push up the trading to higher levels than those observed at the Monday session.
JPY
The Japanese currency was traded the whole Monday against the “buck” almost at one and the same level under the terms of quite a large amount of news concerning the economy of Japan. The January report of the economic observers determined the improvement. This index grew up to 38.8 against 35.4 in December. The payment balance total incurred to constriction in December. The surplus fell down to 1.10 Trillion of yen against 1.30 Trillion. The banking crediting in Japan has also demonstrated the lowering of the intensity and fixed -1.5 per cent y/y against -1.0 per cent y/y at the end of last year. That in its turn has certainly made the monetary supply narrower. M2 aggregate demonstrated 2.9 per cent y/y against 3.1 per cent y/y. Nevertheless, this news has instigated no response at the pair of USD/JPY. The yen has kept itself within a very narrow lateral corridor. This obviously affords another confirmation that the influencing factors upon the Japanese currency still stays the level of the willing to risk at the market as this desire is determined with the news both from the USA and Europe. The information represented already today has demonstrated the growth of the engineering tools orders in January; at that the enlargement was quite impressive, 192.0 per cent y/y against 63.4 per cent y/y. however, as like as not, there’s a base effect in this case as last year the orders in Japan were figuratively speaking in a “free drop” condition. Concerning the shortest prospects for the yen the anxieties as for the sovereign debt of the Euro zone countries are still relevant, and the currency of Japan may start to increase as a shelter-currency again.
Analysis prepared by:
Arkady Nagiev
Forex4you analyst
