Contrary to the expectations that the US dollar would be in good odor with the investors amidst the announcement of special FOMC meeting, where the destiny of the discount rates would be shaped, the American currency was mainly under the pressure the major part of the Monday session. Supposing the GB pound’s enforcement might be a consequence of the political news about the raise of the conservators’ rating, and then the relative steadiness and the attempts to enforce of both the euro and yen should be probably charged to account of the ordinary profit fixation since the events on Friday. The US economic news, which was published the former session, turned out to be much worse than the expectances, and that instigated the optimistic splash at the stock market and also pressed on the US dollar a bit. The decision on the discount rates has never been adopted, while FRS confined itself to discussion of some other issues. As a result, the US dollar has completed the day with a little plus to the euro, but yielded to both the GB pound and yen. The report of the Institute of Supply Management (ISM) demonstrated essential growing tempos of activity for the services in March. The ISM index of the services fixed the growth to 55.4 against 53.0 in February, alongside to the forecast of 54.0. The monthly value was raising the third month running. The indicators, which are considered as advancing, encouraged hopeful prospects as the new orders grew up from 55.0 to 62.3, and the employment index showed 49.8 against 48.6 before. The dynamics of such kind appoints to the recovery of the services – it’s of special importance as the contribution of this branch of economy into GDP is very significant enough. The recently represented data about the outstanding real estates transactions were also much better than forecasted. As the data from the National Association of the Realtors of the USA (NAR) the capacity of the outstanding transactions at the ready homes market suddenly increased in February. The sales index rose for 8.2 per cent m/m in February, while the forecasts were looking forward for the negative result, -0.5 per cent m/m. In the annual comparison the index grew up for 17.3 per cent y/y, compared to 8.6 per cent y/y previously. Probably, in accordance with the data of this repot it’s reasonable to presuppose the beginning of the plateauing at the housing market, though it’s too early to speak about the categorical recovery, as it seems. No American economic macro statistics is going to be published today, but the minutes of the FOMC recent meeting will be represented. As usual, the publication of this document is a significant event as it’s connected to the hopes of the investors to know the prospects of the monetary-crediting policy of the US regulator.

   The common currency was in vantage point against the US dollar in some moments of the Monday session. Obviously, the profit fixation since the Friday sales-outs amidst the good data of the US Labor Report together with the enthusiasm at the stock market, which was caused by the publication of another portion of good economic news in the USA, encourage the investors to be optimistic and to purchase the European currency. Moreover, the impulses to any of the sides durably resulted in the price behavior due to little trading volume. No economic statistics concerning the Euro zone was published as it was a day-off in the Europe. Neither economic news as for the Europe is going to be published today as well. The euro will further stay under the influence of the exterior information, – first of all, the expectances of the minutes’ publication from the FRS recent meeting, when both the interest rates and the monetary-crediting policy of the USA were discussed. Both the Greek troubles and the budgeting apprehensions concerning other countries of the European block are still relevant, and that maintains the negative attitude to the euro and correspondingly encourages the expectances of its further decrease.

   The British pound turned out to be a leader of the growth at the Monday trades. The sterling opened the session with a significant gap against the “buck” and enforced itself keeping advantages during the whole first day of the trading week actually. The cause for such interest to the Briton was the improvement of the investors’ tone amidst the distinct release of the political ambiguity in Great Britain. The news form the pre-election venues stated that the Conservators were outweighing to their benefit and that lessened the probability of the invalid parliament’s occurrence since after the elections due to the absence of the majority. Reported by mass media, the election date is going to be announced today. In Great Britain the Easter Monday was also a day-off, that’s why, the economic data weren’t published. The purchasing managers’ index for the development branch (PMI) for March is going to be represented today. The forecasts expect that this indicator will rise a bit for the development sector, to 48.8 from 48.5 in February. This economic area is still the dullest in the economy of the “Isles”, and any improvements higher than the forecasts may support the British currency. Besides, the volumes of the disbursed mortgage loans in the 4th quarter will be publicized – the shortage of the negative dynamics till -3.0 Billion from -4.9 Billion of pound is presumed, and that may obviously be scored under the sterling’s belt as well; if certainly it’s proved with facts.

   The profit fixation since after the yen’s sales-outs on the previous Friday caused the yen’s purchases at the Monday trades. The Japanese currency enforced itself against the US dollar and the Europeans in the first trading day of the current week. Quite possibly, the additional support to the yen was provided by the recent opinion that in the near future the state regulator wouldn’t take new measures considering the monetary-crediting policy’s softening and increase its estimation of the economy as recently, in March, CB declared that the growth of the economic activity had been observed in Japan. Moreover, the Tankan report, which appeared on Thursday, demonstrated that the large producers’ opinion had improved, and the actual GDP of Japan had increased in the 4th quarter of 2009 for 3.8 per cent. Tomorrow will be high-charged from the point of view of the significant economic information, when the Bank of Japan will pronounce the decision concerning the interest rates and the Governor of BoJ will hold a press conference. At the same time, the data, which have already been published today, demonstrated the growth of March leading indicators index till 97.9 per cent against 96.7 per cent earlier, and that hasn’t influenced on the market in general. Concerning the perspectives of the Japanese currency, since after the significant decrease it’s quite reasonable to wait for some retracement, and the pair of USD/JPY may decrease as a result of it.

Analysis prepared by:

Arkady Nagiev
Forex4you analyst