The American currency recovered at the session on Wednesday all losses it had sustained a day before against the European currencies and enforced itself even more concerning the yen. The problems of some European countries have appeared nowhere, and this fact took the side of the “buck” again. Moreover, the support for the US dollar appeared from the side of positive enough economic data published on Wednesday, which afforded grounds for the strengthening of the expectances of rates increasing form the side of the Federal Reserve earlier than predicted. The expectation of the publication of the minutes from the FOMC January meeting has also warmed up the interest for the “greenback”, and later the exact representation of these documents as well. These minutes demonstrated the self-confidence of the members of this Committee that the recovery of the American economy was picking up steam; they might also be estimated as ones making hints on earlier than foreseen stiffening of the monetary-crediting policy. The economic news concerning the USA was represented with the development area data. The number of the recent developments grew up in January; in accordance with the represented information the number of the new houses groundbreakings enlarged and summed up to 591 thousand per annum; whereas the forecasts presumed that the growth will have fixed the increase till 580 thousand only after 553 thousand in December. Meanwhile, the capacity of the development permissions (the indicator considered as advancing) fell down for 4.90 per cent in January, till 621 thousand; while expected 63 thousand. Most likely, it was caused by the powerful increase of December when there was an increase for +10.9 per cent till 653 thousand. The manufacturing data also attached to this flow as they appeared to be better than expected. There was a growth for 0.9 per cent here; at the same time the production in the processing sector rose for 1.0 per cent. The forecasts resolved themselves to +0.8 per cent as for the total indicator. Today the news will represent the data concerning the manufacturing inflation of January and the quantity of the jobless claims for the former week. The producers’ price index is supposed to increase for 0.8 per cent m/m, 4.4 per cent y/y. The number of the preliminary jobless claims is also predicted to see with growth till 450 thousand after 440 thousand before – that disappoints a bit though doesn’t claim for pessimism. Besides, the business behavior index foe February from FRB Philadelphia will be also interesting as the growth is also predicted till 17 points after 15.2 here. To say it in a word, no negative is predicted for the “buck”. That’s why the further increase is quite possible. The only reason for the apprehensions is the technical factors represented with the powerful supports/resistances, which the price as for the major pairs has approached to.

EUR
   The development of the events on Wednesday stated that the troubles of the European countries haven’t been forgotten yet. That’s why the enforcement of the common currency at the previous session was a consequence of the investors’ willing to fix the profit, rather than the comeback to the high level of the appetite to risk. The euro collapsed till the Tuesday opening levels having given back to the “greenback” all its capture of that session. Furthermore, the EU economic data published yesterday appeared to be worse than expected; that in its turn couldn’t afford grounds for the maintenance of the interest to the common currency at high enough level. The positive totals of the foreign trading in the Euro zone grew up in December less than predicted and amounted to 4.4 Billion against 4.0 Billion of euro in November. Moreover, the November data were revised to the side of decrease as it had been reported about 4.8 Billion of euro in the last autumn month before. The analysts’ forecasts resolved themselves to the fact that the positive totals of the foreign trading would increase to 5.0 Billion of euro in December. No important news as for the EU economy is going to be published today. The euro will be further kept under the influence of the external factors. Concerning the short perspectives – as the market supposes and by the way it’s difficult to take issue with that – until the assured outline of the Greek troubles solution is represented the euro will further be kept under the decreasing pressure.

GBP
   The GB pound faced the same attitude as the euro on Wednesday session. The Briton collapsed till the rates whereupon it had started its increase on Tuesday. The economic data form the “Isles” haven’t favored the warming up of the interest to the sterling. The unemployment in Great Britain rose rapidly in January. The number of the jobless claims grew up for 23.5 thousand; at that the shortage had been expected for 13.5 thousand. The December results, when it was -9.6 thousand, give assurance in the positive trend. However the unemployment level has still been kept at the previous rate of 5.0 per cent. The messages from the Bank of England that in February the members of the Committee for the Monetary-Crediting Policy had adopted unanimously the decision to cease the accomplishment of the Bonds Relief Program supported the British currency for the short haul, however, not for a long time as it was also noticed that “there were arguments” for the prolongation of the Bonds Relief Program; and BoE announced that it could prolong its expiration period. The GB pound may have a difficult day today. As known, Great Britain has also faced the troubles with the state finances. That’s why, the today publication of the January data concerning the needs and borrowings of the state sector as for the funds available may make a negative influence upon the “cable”, if certainly, it appears to be worse than the forecasts predicting the curtail. The information about the wide monetary supply (M4 aggregate) will be in the focus of special attention. The previous results demonstrated -1.1 per cent m/m, 6.4 per cent y/y. That’s why, in case of the maintenance of the curtailing tendencies the sales of the GB pound will possess new sizes.

JPY
   The Japanese currency continued its decrease against the US dollar on Wednesday session as well. The growth of the American securities’ profitability has obviously afforded grounds for the renovation of the investments by means of foundering through the Japanese currency. In accordance with the news publicized today already the Bank of Japan has maintained the rates at 0.1 per cent and announced that it wouldn’t broaden its crediting programs for the commercial banks. The CB probably tries due this announcement to confront the pressure from the side of the state government as it demands from the monetary authorities to intensify its efforts to surmount the deflation and to maintain the implements’ arrearage simultaneously for them to be applied in case of emergency. The information reflects itself at the market already as the yen is increasing against the US dollar and other majors. If take into account that no extraordinary news is expected today it’s reasonable to predict the continuation of the Japanese currency’s enforcement at the current session. Moreover, there has already been a ground for the profit fixation.

Analysis prepared by:

Arkady Nagiev
Forex4you analyst