The US has rapidly resumed its dominant position at the market. The fainted hopes that the Greece rescuing scheme would be suggested in the shortest possible time, together with the less impressive economic data from Great Britain, and finally, the ambiguous situation in Japan afforded grounds for raising interests to the “greenback”, which enforced itself by large scale on Tuesday. However, the positions of the “buck” were anything but expressly steady at the former session as the market demonstrated the inclination to risk at bare possibility. The continuation of the increase at the US stock market became a good signal for that, and during the American session the US currency incurred the sales-outs for some period of time. Moreover, some economic news favored the pressure on the US dollar. The ready homes market’s sales fell down in the USA for 0.6 per cent till 5.02 Million of houses per annum in February compared to 5.05 Million in January. Frankly speaking, the forecasts expected more falling down – for 2.0 per cent till 4.95 Million of houses. At the same time, the sales grew up for 7.0 per cent in the annual comparison in February. Despite the result turned out to be better than forecasted, the decrease the third month running does never encourage the optimism. Against this very background the statement of the price decrease at the real estates market was looking quite natural, while the fresh published housing prices index in the USA showed for January -0.6 per cent as compared to December. On the contrary, the only Richmond ISM index for the manufacturing gladdened with positive data: in accordance with the FRB Richmond’s report this indicator grew up till 6 points in March after 3 points before and alongside to the expectances of the maintenance of 3. The news set for the current day will again represent the state of affairs in the housing market’s sales, but concerning the primary one this time. The forecasts predict the probability of a little growth amidst the January results i.e., the uplift to 315 thousand from 309 thousand of houses. Besides, the data about the durable goods orders are also going to be published. This advancing indicator will probably demonstrate another increase in February, though with the tempos’ retardation – 0.9 per cent after 0.3 per cent in January. Today no special frustrations are expected for the “buck”, but still, the European situation will further stay the main source of aggravation for the market. As it’s a factor that favors the US dollar, that’s why this currency will probably last its enforcement. However, such technical factors as the powerful supports within the price range 1.3400-1.3300 for the pair of EUR/USD should also be taken into account.

   The common European currency renewed its decrease at the opening of the Tuesday session. Zero drifts in the Greek issues are still pressing the euro. Despite the Head of the European Commission J.-M. Barroso declared about his belief that Berlin would support the idea of rendering the aid the investors are still better guided with the remarks of the chief executive of Germany A. Merkel. The Bundeskanzler of Germany insists on the absence of necessity to discuss this package deal in the current moment. The situation of the kind certainly provokes the anxieties at the market, while Greece has to pay out more than 20 Billion of euro to redeem its obligations in just near future. No economic data as for EU was published on Tuesday, however, the current news set concerning the Euro zone is rich enough. The purchasing manager’s indexes (PMI) for March both for the Euro zone and Germany so for the manufacturing as for the services will be publicized. The services indicators are expected with the correction to the side of improvement, but the manufacturing ones should be worsened for Germany and maintained at the same level all over the Euro zone. However, the IFO Institute’s March report will attract special attention as the “sentiment” indexes are predicted to be seen with growth – the business behavior index to 95.6 since 95.2, the current economic situation’s evaluation index to 91.0 from 88.9, finally, the economic sentiment index – till 101.0 from 100.9. Nevertheless, the euro absolutely depends on the solution of the Greek issues. That’s why, it’s reasonable to expect its further decrease considering this argument. However, it’s worth recalling, the positive dynamics at the stock markets provides the support for the European currency. In other words, all that remains for the “bulls” as for the euro is to put their trusts in this very factor, which enlarges the inclination to risk, and also in the technical situation, which is determined by the powerful supports for the common currency.

   The British pound didn’t make an exception and also decreased against the US dollar at the trades on Tuesday. Besides the general mood, which determined the positive as for the “greenback”, the data about the domestic economy have also provided the pressure on the sterling. More weakened than expected data about the consumer inflation significantly smoothed the possibility of stiffening of the monetary-crediting policy by the Bank of England. The expectation of such kind appeared since after BoE has stated about its disturbance concerning the escalation of the inflating processes amidst the dull GB pound. The pressure on the sterling enforced when it became known that the consumer prices index (CPI) in Great Britain increased to 0.4 per cent in February in comparison with the previous month when the forecast expected +0.6 per cent, it was +0.3 per cent y/y in the annual comparison, alongside to the expectancies of +3.2 per cent y/y. The core inflation, without food products and energy resources prices, also fell down till 2.9 per cent y/y in February from 3.1 per cent y/y in January. The CBI data about the retailing not only decreased but also turned to be worse than the forecasts as the retailing index lowered down to +13 in March against +23 in February, when it was expected +20. There will be not much news from the “Isles” today. But they’re very significant and important, because the market expects the publicizing of the British budget. Except for just economic significance the release of the annual budget is also of great political importance due to the anticipating parliamentary election in Great Britain. The perspective to get both the parliament and the government, both of which are unable to accomplish the budget’s consolidation, is enlarging by reason of the possibility of publication of the data, which are not popular among the electorate. In other words, the sterling may get the reason for the extra pressure.

  The Japanese currency decreased against the US dollar on Tuesday. Obviously, the recently published minutes of the Bank of Japan’s meeting encouraged the investors to expect further softening of the monetary policy in the country and that’s why they also caused the yen’s sales. Besides, the raise at the stock market has most likely elevated the interest to the yen as a foundering currency. However, it should also be mentioned, that the dullness of the Japanese currency wasn’t absolute, while the Japanese repatriating flows in the end of the fiscal year obviously make a restricting influence still yet and keep the Japanese currency within the ranging trade. The information that has already been published today stated the decrease of the trading balance surplus in February to 470.5 Billion of yen from 728.4 Billion of yen. Strictly speaking, that turned out to be higher than the forecast, which had predicted the decrease to 390.0 Billion of yen. Concerning the perspectives of the Japanese currency, the forecast as for the pair of USD/JPY is still same i.e., the ranging trade, but the continuation of the growth is possible for the instrument of EUR/JPY amidst the Greek troubles all the same.

Analysis prepared by:

Arkady Nagiev
Forex4you analyst