The American currency charged under its belt one more day of increase against the Europeans, though it fixed dullness against the yen. This confident enforcement against the euro may be caused by the escalation of the apprehensions concerning the solving of the Greek troubles, because the state authorities of this country hadn’t liked the terms of rendering the aid neither from the side of IMF, nor from EU due to their expensiveness. This was another exasperation of uncertainty, which pressed upon the euro, and it became a sells-outs leader of the market on Tuesday. The achievements of the “greenback” against the GB pound were less impressive as the sterling passed through the pressure amidst again strained suspicions as for the absence of the majority in the pending British Parliament. Naturally, such a layout determined the departure out of risk and consequent enforcement of the yen, which enjoyed special attention of the investors by reason of the profit fixation as well. No macro statistics concerning the USA was published; that’s why, all attention was focused on the publication of the FOMC minutes. This information has slightly changed the picture of the market events and also afforded grounds to the investors for the sales-outs of the US dollar, especially against the GB pound. The FRS representatives denoted their assuredness in the economic recovery in their minutes, though they were still of the mind that it wasn’t time for raising the interests rates. The Governing Board of the United States Central Bank still intent to maintain the interest rates at the mark next to zero for “quite a long period of time”. The pressure upon the US dollar will certainly increase amidst such announcements. The today news set is remarkable for a greater portion of the political events, rather then the economic statistics’ publication. Both the Head of FRS B. Bernankey and the functionary of FOMC Hennig will deliver speeches during the American session. Concerning the economic component the only consumer crediting data are worth noticing as they allow to judge about the intensity of demand. The forecasts run about the increase of the capacities, though much less than before, as it was +1.4 Billion in February since after +5.0 Billion of dollar in January. The US dollar will obviously maintain its leading positions, but the technical factors stand for less confident enforcement of the “buck”.

  The information that the Greek authorities would have liked to avoid the participation of IMF in rendering the financial aid, which had been worked out in cooperation with EU in the previous month, afforded grounds to the investors for selling-outs of the common European currency. As it became known from a deep throat, the Greek didn’t like the IMF standard conditions for aid rendering, though the EU terms didn’t also excite admiration as they suggested paying out 6.0-6.5 per cent per annum. Against this background the authorities of this Balkan country casted their glances on the USA with the intention to place their US dollar bonds in total amount of 10 Billion of dollar in this country. All the fuss over this caused the intensive exaction of resources from the Greek banks by both of the companies and also wealthy private persons. Certainly, the picture of such kind has never aroused the interest to the euro; that’s why, the European currency sought down into the sector next to the price minimums against the US dollar. No economic news was published; though today the news tape is to represent a plenty of essential information as the publication of the final data about the Euro zone’s GDP for the 4th quarter is expected; this information will probably confirm only the slight increase of the indicator, which has been stated before. Besides, the publicizing of the final value of the purchasing managers’ index for the services (PMI) both of Germany and the Euro zone in whole without any changes as well. The German manufacturing orders are forecasted with growth, though per annum only, whereas minus is possible in the monthly comparison, -0.9 per cent m/m, and 21.7 per cent y/y. As it’s clear, no support for the common currency is expected from the side of the fundamental data. The only hopes for the “bulls” concerning the euro might be connected to the supports, which have already been achieved by the common currency.

  The British pound turned out to be a leader of the decrease among the other major currencies amidst the maintenance of the ambiguity around the political situation in Great Britain. The results of the recent polls twisted the knife as one of the polls has demonstrated that the break-off in favor of the Conservative Party out of the governing Labor Party amounted to 10 per cent points; though the totals of another one stated four points only. However, the pressure on the GB pound occurred in the first part of the trade only. At the American session the sterling has neglected the major part of its losses and completed the day next to the opening prices of the session. The raise of optimism both at the products and stock markets and also the publication of the FRS minutes provided the support to the British currency. The publication of the economic data might support the “cable”; but very good data about the development area of Great Britain, where the activity increased in March for the first time for more than two recent years, and the purchasing managers’ index (PMI) rose up to 53.1 against 48.5 in February, were neglected by the data, which demonstrated the shortage of the mortgage loans in the 4th quarter for 4 Billion of pound, alongside to the forecasts of -3.0 Billion of pound. Today the final part of the general picture of the business activity in Great Britain – the purchasing managers’ index (PMI) in the services for March will be represented to the market. The indicator is expected to fix some retardation of increasing tempos and turn out to be at 58.0 after 58.4 in February. Generally speaking, as it seems, the political troubles of the “Isles”, which are connected to the parliamentary elections, will continue to press on the sterling, which will “have” to renew its decrease, or most likely, to trade within a wide range in near future.

  The currency of Japan enforced itself at the last session against all its major opponents. The departure out of risk caused the volume reduction as for the carry trade transactions, and the investors preferred to return into the yen as a foundering currency. As concerning the pair of USD/JPY, it was traded with decrease during the Asian session by reason of the sales of the American, European and also Asian hedge-funds, which targeted the profit fixation. The results of the meeting of the Bank of Japan, which have already been pronounced today, stated the maintenance of the key interest rates at the previous mark of 0.1 per cent as it was expected actually. This very decision to maintain the key interest rates without any changes was unanimous. Moreover, the Governing Board of CB has decided not to take next scheduled measures targeted to struggle against the deflation, but to keep velvet monetary conditions. It was also mentioned about the improvement of the corporative affairs, and that should make a positive influence upon the households. Concerning the yen’s prospects, as it seems, its decrease may be renovated amidst the improvement of the economic parameters in the USA.

Analysis prepared by:

Arkady Nagiev
Forex4you analyst