The lack of significant economic news that set on the trading checkpoints and the midterm level’s mood together with the relatively dull in concerns of information political background have reasoned the ranging nature of the trades at the session on Wednesday. The positive data from China concerning the large growth of the export from this country have afforded grounds for some enforcement of the investors’ assuredness in the global economic recovery. However, the flimsy economic indicators both from Japan and the Europe this time have already smoothed the situation. As a result, the US dollar was traded multidirectional and totally fixed minus concerning the euro, a very little profit to the GB pound and more confident advantage of the yen. The general picture of those events encouraged an opinion that the uncertainty began to increase at the market. The US economic indicators were represented with the data of wholesale commodity stocks last week, the report demonstrated a sudden decrease for 0.2 per cent in January; though considering a rapidly growing demand as it turned out to be. The forecasts’ presumptions were connected to the commodities’ raise for 0.2 per cent. The January wholesaling increase for 1.3 per cent states that the fact of curtailing is far from being negative and affords grounds for hopes for the orders’ enlargement and favorable prospects respectively. The second important news from the USA was of distinctly negative nature: the US Federal Budgeting deficit was the most essential monthly indicator in February for the whole period of observations. The negative budgeting totals was fixed in amount of -221 Billion of dollar in February, whereas in arrears of fiscal 2010 in the recorded volume of -651.6 Billion of dollar. Meanwhile, a “drop” of positive was also found in this report as it has been mentioned that the budgetary receipts grew up in February in comparison with the same period of the former year; that exactly has happened for the first time for almost two years. The key point of today news will be the publication of the January trading balance data. A little deficit enlarging is presumed to be seen, till -40.8 Billion of dollar from -40.2 Billion of dollar. Moreover, the market will pay its attention to the number of the preliminary jobless claims – some shortage is expected here. Most likely, this information will never become a signal for dynamic actions at the market, and the trading will keep itself under the influence of the political declarations. At the same time the opinions that FRS will be the first one starting to increase the rates, and that may happen in the beginning of the coming summer, enforce. The US T-Bonds’ profitability spreads’ widening is considered as one among those signals. Such a layout obviously causes the “buck” maintenance of its advantages at the market.

EUR
   The splash of interest to the common currency in the very beginning of the Wednesday session due to the Chinese news was impermanent; and the domestic economic data represented by the German foreign trading returned the negative attitude to the euro at the market, and this currency incurred the sales-outs and also lowered down till its weekly minimums. Nevertheless, the result of the day has been on the euro that completed the session with growth against the US dollar. The second half of the Wednesday trades was remarkable for the enforcement of the European currency. Quite possibly, the support for the euro was provided with the self-confident announcements of the ECB representatives. The member of the European Central Bank’s Governing Board Ch. Noyer declared on Wednesday that he ruled out the possibility of Greek debts’ default; he also spoke with approval of the Athens’ efforts aimed to making order in the state finances. The EU statistics, as already mentioned, became a matter of subject for the common currency’s sales-outs as according to the published data the German trading balance’s positive totals lessened to 8.7 Billion of euro, while it was 16.6 Billion of euro in December. The German payment balance current account’s positive totals also lowered down to 3.6 Billion of euro against +19.9 Billion of euro in December. Amidst the likely dynamics of the German foreign economic relations it will be quite reasonable to predict that the EU economic recovery is far from having steady processes and increasing tempos; and that says the rates increase in the Europe is extremely improbable. In this regard it’s possible to presume the common currency’s maintenance of its dull positions both at this moment and in the long term. Moreover, the Greek debts’ issue is very far from its decision, but the probability of the likely pointed question occurrence in other countries of the Euro zone even worsens the situation. No EU economic news is going to be published today. The euro will keep itself under the influence of the external information and also the political announcements of the EU financial top-management.

GBP
   The beginning of the day was quite usual for the GB pound as for recent times. The British currency was crushing down against the US dollar, with very impressive tempos at that. Obviously, the string of the dull British economic data published earlier continued to provide pressure upon the “cable”. Its quite possible that the "oil into the flame" was added by the announcement of the Prime-Minister of Great Britain G. Brown that the Government will steer its line supposing the further maintenance to the economy and won’t take any measures aimed to expenses’ shortening this year targeting to guarantee the assertion of the economic recovery. Amidst the heavy budgeting deficit in Great Britain the announcements of such kind may strengthen the negative opinion to the GB pound quite enough. Furthermore, the sterling’s sales strengthened under the influence of the economic data publication. The processing sector’ production in the “Isles” rapidly fell down in January, like to the manufacturing in general, whereas the growth was expected. The manufacturing production shortened for 0.9 per cent in comparison with the previous month, alongside to the forecasted growth for 0.3 per cent m/m, and the manufacturing production in whole demonstrated -0.4 per cent m/m and -1.5 per cent y/y. Although, the growth of manufacturing production was expected to be seen for 0.2 per cent m/m and 0.7 per cent y/y. Thereupon the appearance of this information the GB pound has exercised the new weekly minimums against the US dollar. However, the second half of the session was in marked contrast to the first half; the GB pound started its enforcement and neglected the greater part of its losses and completed the day with a little minus to the “greenback”. Its quite possible, that occurrence of the interest to the sterling’s purchases may be charged together with the investors’ willing to fix the profit to the account of the announcements of the Bank of England administration that it’s reasonable to presume the absence of necessity to implement any additional stimulation measures for the British economy; it means the widening of the assets relief program in amount of 200 Billion of pound isn’t expected. No economic publications are planned for today in the “Isles”; the GB pound will apparently reside within ranges. Concerning the perspectives, the ambiguous political situation in Great Britain keeps the GB pound position precarious; on the other hand, the enforced flow of negative economic results suggests setting mind on further derogation of the British currency.

JPY
   The currency of Japan met with a great pressure at the session on Wednesday and also marked out the new minimums against the US dollar. The reports that the export from China increased for 45.7 per cent in February and greatly exceeded the expectances favored the departure from the shelter-currency, which the yen is. The machinery and equipments orders’ narrowing in Japan itself this time has cooled the attitude to the yen; moreover, it swam with the current of negative attitudes to the Japanese currency and has provided the further sales-outs. The Japanese data published today already have demonstrated the revision to the worse side as for the data of GDP for the 4th quarter of 2009. The final evaluation has fixed the GDP runup for 0.9 per cent q/q, whereas the advancing one had stated about +1.1 per cent q/q. Nevertheless, the yen demonstrates some growth during the current session. The absence of the risk inclination obviously pushes the investors to the closing of the risky positions; and that in its turn reasons the purchases of the yen against other majors. Besides, it’s also necessary to remember that it’s March “outdoors” i.e., the final month of the fiscal year in Japan, and that suggests taking into account the profit’s repatriation into the “Land of the Rising Sun”.

Analysis prepared by:

Arkady Nagiev
Forex4you analyst