The US dollar was exposed the pressure again on Tuesday. The results of the session appeared to be much more successful for the “bears” as for the “buck” than a day before. The American currency fell down against the Europeans and increased as for the yen. That denoted the raise of the willing to risk at the market. Most likely, the market pounces on a vestige able to provide the support for the common European currency and also for the sterling. The news that the President of ECB J.-C. Triche departed the bankers’ summit in Sidney ahead of schedule and went to the EU summit planned for Thursday, where the issue of the assistance for Greece can be solved, afforded grounds for the enforcement both of the euro and the GB pound against the US dollar on Tuesday. At the same time, the German government declared frankly enough that no question was about the support for Greece. Obviously, it’s possible to make a conclusion at such a message, that all sales of the American currency in these first days of the week are connected to profit fixation by all ends. No significant statistics was published in the USA, the data as for the economic optimism from IBD/NIPP demonstrated the decrease of February index till 46.8 after 48.8 and December wholesale supplies showed the lowering down for 0.8 per cent in December after the growth for 1.5 per cent in November, alongside to the expectancies of the growth for 0.5 per cent by forecasted. Obviously, the US dollar experienced far from its best day on Tuesday, from the point of view both of the economic news and the political situation. The today news, as it seems, won’t encourage the raise of intention for the US dollar purchases. The trading balance totals as for the USA, as expected, may demonstrate both the improvement and the shortening of the deficit till -35.5 Billion from -36.4 Billion of dollar. However, the growth of the budgeting deficit in January till 70.0 Billion of dollar is able enough to maintain the neutral attitude to the “buck” at the market, and so favor the US dollar weakening in its short-term variant still yet. Meanwhile, the corrections may be contributed by the speech of B. Bernanckey as for the issue of the monetary-crediting policy, if this performance denotes its stiffening in the shortest possible time.

EUR
   The euro shifted its positions till new local maximums against the US dollar on Tuesday. The rumors concerning at the EU summit on Thursday there would be represented and adopted the bailout plan for Greece as a country facing budgeting troubles have supported the demand for the common European currency. At the same time, the announcements from the side of Germany that neglect these hopes froze the intensive purchases of the euro. Nevertheless, the euro has fixed the growth against the US dollar on Tuesday almost for 140 points. The EU news hasn’t encouraged to good mood as concerns the processes in the European economy. The positive totals for the German foreign trading curtailed till 13.5 Billion in December against 17.2 Billion of euro in November. Moreover, the export’s increase for 3.0 per cent m/m and also the growth of import for 4.5 per cent m/m became resultant. To say it in a word, the export oriented economy of Germany faces troubles as for the demand for its products whereas the demand for the imported goods is rising. No significant and interesting news as for EU will be published today. The euro will be kept under the influence of foreign information. Quite possibly, the rush grounded upon the hints on the Greece problems solving will be denied and the common currency will appeared to be under the pressure again.

GBP
   The beginning of the trades in Tuesday was on the decrease of the British currency. The GB pound was falling down against the US dollar amidst the data that have demonstrated the sudden increase of the foreign trading deficit in Great Britain in December. Moreover, “the oil in the fuel” was also put by the information from the Fitch Rating Agency concerning the dullness of the British state authorities’ plans as for the stabilization within the state finances’ sector. According to the statistics publicized on Tuesday the deficit of the British foreign trading increased to 7.3 Billion in December against 6.8 Billion of pound in November. The forecasts resolved themselves to the deficit’s curtailing to 6.7 Billion of pound would be observed. The reasons for the deficit’s growth were supposed to be the import exceeding the export, and that in its turn is a negative process in the foreign ties of the “Isles”. However, later on the GB pound has increased and fixed the “profit” to the US dollar summarizing the day due to the splash of the risks inclination after the publicizing of the information about the probable assistance for Greece. The news component of the current session has significant information for GB pound. The December data both for the manufacturing and the processing sector’s results are going to be published today. The forecasts predict the increase per month and the curtail of the negative results annually, 0.2 per cent m/m, -4.1 per cent y/y, whereas in the previous period it has been 0.4 per cent m/m, -6.0 per cent y/y for the manufacturing in general; while for the processing sector it’s expected 0.3 per cent m/m, -3.1 per cent y/y, as before it has been 0.0 per cent m/m, -5.4 per cent y/y. Besides, the Quarterly Inflation Report of the Bank of England will be published. As known, the prices in the “Isles” are showing the steady growth, which exceeds the targeting levels of the British regulator. This very dynamics has been affraying the market for a long time already by reason of the probable steps of BoE directed to the retardation of the process. Summarizing the before mentioned, the report will attract the special attention. If it contributes the slightest hint on the stiffening of the policy, the GB pound will continue its enforcement begun the day before.

JPY
   As is typically the case for the periods of increase of the appetite to risk, the yen has weakened against all majors at the trades on Tuesday. The increase of the risky assets prices has caused the growth of the carry trade capacities, and correspondingly the sales-outs of the Japanese currency. The economic data from the “Land of the Rising Sun” published already today determined the positive results at that much better than the forecasts. The capacity of the machinery and equipment orders rose in December. The indicator fixed 20.1 per cent m/m, -1.5 per cent y/y, against -11.3 per cent m/m, -20.5 per cent y/y before, and by forecasts of 8.1 per cent m/m, -10.8 per cent y/y. The situation as for the prices has also improved. The wholesales prices domestic index demonstrated 0.3 per cent m/m, -2.1 per cent y/y in January, at the expectances of 0.1 per cent m/m, -2.3 per cent y/y, and the December data equal to 0.0 per cent m/m, -3.9 per cent y/y. Against this background the yen enforced itself a bit; however, as it seems this moment shouldn’t be considered as a steady one. Everything will depend upon the degree of the willing to risk at the market. In case of the raise of interest to the risky assets the yen will find itself under the pressure again.

Analysis prepared by:

Arkady Nagiev
Forex4you analyst