The spring began from the US dollar enforcement. The overwhelming advantage of the “greenback” against the Europeans and a little one in concerns of the yen was observed at the session on Monday. Some doubts as for the American currency, which might arouse last Friday, when the “buck” demonstrated not very convincing result, were most likely assuaged by the massive enforcement as for both the GB pound and euro. Both the political and budgeting troubles in Great Britain and the Greek crisis that hasn’t arrived at decision yet were the main factors of support for the “greenback”. Till the complete of the trades the European currencies got back some portion of their losses amidst the optimism of the stock markets in the USA; but it was a small share only as the result of the first day’s session of this week and the spring as well was on the US dollar. The statistics concerning the US economy demonstrated the data that may afford grounds for the presumptions as for the increasing demand in the USA. As the news stated the Americans spent money more lively in January than expected. In accordance with the represented data the personal incomes grew up for 0.1 per cent m/m; whereas the personal expenses enlarged for 0.5 per cent m/m. The money saving rate turned out to be at the least possible level starting from 2008. Such a layout speaks well for the probability of the consumers’ anxieties decreasing and the change of mood, which usually predominate during the crises making people to set apart more than waste. The forecasts expected the incomes’ growth for 0.4 per cent and the expenses’ increase for 0.4 per cent m/m in January. Moreover, the exact fact of incomes’ increasing for the sixth month running and also the expenses’ growing for the fourth month running possesses inspiration. However, those data turned out to be the only one that might be considered as positive as the report of the Institute of Supply Management (ISM) stated the activity in the US manufacturing grew up with slower tempos in February. The manufacturing index from ISM fell down to 56.5 against 58.4 in January; whereas the forecasts resolved themselves to the fact that the decrease would be more moderate and the indexes would show 57.5. Meanwhile, the component of the indicator – the employment index increased to 56.1 against 53.3 in January; and that offers hope for the comeback to growth in the nearest prospects. Although, the development expenses were falling down in January in the USA the third month running. The decrease was for 0.6 per cent till 884.1 Billion of dollar per annum as compared to the previous month, while the December indicator fixed -1.2 per cent and the November one was -2.5 per cent. No significant information concerning the USA is planned for publication today. The US dollar positions will obviously stay powerful; though the profit fixation next to powerful supports/resistances is also quite possible. Meanwhile, as it seems to be, there’s a great probability of the ranging trade.

EUR
   The euro collapsed against the US dollar basing at the former “yeast” that provides the disturbance with the Greek debt. The reports about the French-German rescue schedule, according to what the before mentioned countries will redeem the Greek bonds, turned out to be false, either incurred to great doubts anyway; since the German Chancellor A. Merkel had claimed the necessity for the countries of the block to solve their own problems in accordance with the treaty that rules out the possibility to rescue other countries. The economic news over the Euro zone demonstrated the positive result in general and the ground for optimism became the data as for the EU employment. The unemployment level in the Euro zone countries made up 9.9 per cent in January, while the expectances of the growth weren’t confirmed alongside to the forecast of the raise till 101 per cent. Besides, the December data were revised to the side of decrease as well. The unemployment level steady for the third month possesses the hopes for the beginning of the improvement at the labor market; however, the data still confirms curtail of payroll. Following the information from the Eurostat the jobless runup in the Euro zone summed up 38 thousand in January, and the total capacity of the unemployed amounted to 15.7 Million of people. The supply management data for the manufacturing of both Germany and the Euro zone in general were also represented for February. The purchasing managers’ index grew up, and the causes for the raise were the export increase together with the recovery of the domestic business commodities. The PMI index grew up to 54.2 against 54.1 in January in the Euro zone and to 57.2 from 57.1 in Germany. The today EU news set will consist of the consumer inflation data in February and manufacturing one in January. The advancing index of the consumer prices is forecasted at 0.9 per cent after former 1.0 per cent, and the producers’ prices index (PPI) at 0.6 per cent m/m, -1.1 per cent y/y; while before it had been observed 0.1 per cent m/m, -2.9 per cent y/y. As already mentioned in the previous survey, it’s a very difficult problem for the Euro zone as the increase of the consumer prices alongside to the growth of the producers’ transfer prices at the demand decrease in the Europe cause the certain negative perspectives.

GBP
   The British pound incurred to powerful sales-outs at the trades on Monday and completed the day with the great minus against the other majors. The budgeting troubles of Great Britain put this country on a par with Greece; and the public opinion poll demonstrates that the political situation complicates the problems as inconclusive results are possible enough at the anticipatory election, as they wouldn’t provide majority in the parliament and embarrass the adoption of the decision aimed at the budgeting deficit overcoming. Besides, the rumors about the purchase of AIG branch by the Prudential's, which has great troubles, pressed upon the British pound. The statistics as for the “Isles” economy didn’t change the market’s opinion, though some part of it was noted with the positive dynamics. The consumer crediting in January increased by the quickest possible tempos for last year, and consisted 2.029 Billion of pound against 1.461 Billion in December. But in spite of such positive changes, the runup speed of the wide money supply retarded to 4.9 per cent y/y, and that raises the probability of further widening of quantitative softening. The home prices’ growth was also fixed in February; following the data from the Hometrack the housing prices in Great Britain increased for 0.3 per cent m/m and for 0.4 per cent y/y. At the same time the supply management’s data for the manufacturing didn’t demonstrate any increase; the purchasing managers’ index (PMI) in the industries maintained itself at the level of 56.6 after 56.6 in January. It must be noted that at the American session the sterling tweaked its positions due to the profit fixation and the raise of the US found market. Nevertheless, the general result of the day was depressing. Today news will represent the second part of the triptych picture of the business activity in the "Isles" i.e., the purchasing managers’ index in the development sector (PMI Construction) is forecasted with the growth till 48.9 from 48.6 in other words, with the positive trend the affairs in the development area still stay within the zone of decay, lower than 50.0. Unlikely, these data will provide the support to the “cable” if certainly they don’t denote a sharp growth and the pass over to the positive territory, higher than 50.0. Obviously, in the nearest future the GB pound will be within the ranging trade with the incline to the side of decrease.

JPY
   The currency of Japan decreased a little against the US dollar at the trading on Monday and was the most balanced as for the “buck” compared to other majors. The news from the USA supported the yen a bit, but the result of the trading stayed on the “greenback” by all means. Concerning the attitude to other currencies the Europeans have also fixed significant losses to the yen as well. The economic data from the “Land of the Rising Sun” demonstrated an ambiguous picture as the unemployment level fell down to 4.9 per cent in January against 5.1 per cent in December; but the households’ expenses collapsed to 1.7 per cent y/y in the first month of the started year against 2.1 per cent y/y before; and the money supply curtailed in February, and the data showed 2.2 per cent y/y against 4.9 per cent y/y in January. The negative dynamics about the money supply is quite able to determine the increase of the quantitative softening capacities i.e., the renovation of the assets’ relief by the Bank of England, as it was decided to be ceased and that reason the risk of the yen weakening. Meanwhile, the satiation in the Europe doesn’t instigate the uplift of the willing to risk, even the decision of the Reserve Bank of Australia concerning the key rates for 0.25 per cent till 4.0 per cent from 3.75 per cent doesn’t encourage to it. The high profitable currencies are further kept under the pressure, and it means that the interest to the yen as a shelter-currency is still relevant.

Analysis prepared by:

Arkady Nagiev
Forex4you analyst