Due to lack of relevant economic news from the USA on Tuesday the US dollar was under the influence of the exterior information from the Europe first of all. More favorable ZEW data and consumer price increase in Great Britain, which surmounted forecasts, afforded grounds for the sales-outs of the “greenback”. The results of the auction for the Greek treasury loan securities’ placement became another ground for pressure on the US dollar as they found market. Later on, however, the US dollar got back its positions, which were lost against the euro, because the concerns about the state debts in the Euro zone, where not only Greece had faced troubles, again predominated in the investors’ tone. The “buck” fixed the negative result to the GB pound, which demonstrated steadiness, though the American currency lost some part of its positions, which were achieved in the first half of the session. The US dollar was a leader in the controversy to the yen all over previous session – obviously, the information that the Japanese authorities emphasized the necessity to raise the inflation rate, was considered as a sign of another forcing of BoJ to further softening of the monetary policy. The optimism at the stock market, which appeared due to good US corporative statements, never warmed up the interest to the high profitable currencies, as they continued to decline during the American session. The result of the well-known Goldman Sachs is worth of attention among the corporative statements, as the net income of the corporation amounted grew up almost twice in the 1st quarter and made 3 456 Billion of dollar, and consequently 5.59 dollar per ordinary share, whereas the forecasts predicted the increase till 4.14 dollar. No significant statistics is expected from the USA today again; though the day is going to be fruitful for the corporative statements as the Apple, Yahoo, Boeing, etc. plan to represent their results. The financial sector will be represented with the Morgan Stanley a Wells Fargo’s statements, and the forecasts presume they will demonstrate reasonably good dynamics.

   The first half of the former week the euro was traded with plus to the US dollar, because favorable economic data and the successful placement of the loan securities by the Greek authorities pushed to the purchases of the common currency. However, as it commonly happens in these days’ situations, the market quickly tempered “mercy with justice” in its attitude to the euro, and this currency incurred the pressure. The concerns that other countries of the Euro zone face the same troubles as Greece did are still the main factor of departure out of risk. Naturally, it’s far from favoring steadiness of good tempers as for the euro. Moreover, the claims of the functionaries form the world famous financial institutions that the loan troubles of the European countries might arouse the second crisis wave also ground the sales. The IMF biannual report dedicated to the global financial steadiness, which was publicized on Tuesday, also spoke about it. Meanwhile the Greek securities’ auction attracted the investors as the bonds in amount of 1.95 Billion of euro were sold. The indexes in the ZEW Institute report also looked promising. The economic sentiment index of Germany made up 53.0 in April against 44.5 in March, alongside to the expectances of 46.0; the current terms index fixed -39.2 since after -51.9 in March. The data of the current account of the Euro zone’s payment balance were in February worse than forecasted as the deficit increased and made -3.9 Billion after -1.7 Billion of euro in January. The data about German prices slightly fed the hopes for the recovery. The producers’ prices grew up in March more than expected as they made +0.7 per cent m/m and -1.5 per cent per annum, while it had been +0.0 per cent m/m an -2.9 per cent y/y in the previous period. No economic statistics is going to be published today. The dealing with the European countries’ debt problems will further stay the main factor of influence, most likely, they will never cause any support for the euro.

   The inflation data, which were published on Tuesday, provided a goo support for the British pound, which grew up against the US dollar and other majors. In accordance with the represented statement, the consumer price index in Great Britain (CPI) grew up for 0.6 per cent in March compared to the previous month and for 3.4 per cent in the annual comparison, while the forecasts expected the growth for 0.3 per cent m/m and for 3.1 per cent y/y. The consumer price core index, which doesn’t include the food products and energy resources’ prices, also increased and noted +3.0 per cent y/y in March since after +2.9 in the previous month, whereas the forecast were much more modest, +2.8 per cent. The retailing prices certainly demonstrated the raise as well: the March index grew up for 0.7 per cent m/m and for 4.4 per cent y/y. Again, the forecasts predicted slighter changes to the side of increase, +0.4 per cent m/m and +4.2 per cent y/y. Such a situation as for the prices both per month and annum sets mind on the predictions of high probability in taking measures by the British regulator, because the pricing influence degrees have already been much higher than the targeting ones (2 per cent) for the Bank of England. The inflation pressure in the “Isles” is far from being something surprising, that’s why the minutes of the Bank of England’s recent meeting, which are going to be published today, may be amazing considering it, because they will possibly bring some hints on the prospects of the BoE monetary-crediting policy. Besides, the data concerning the British unemployment will be represented today. As known, the recruitment matters have been solved positively in Great Britain before; probably, the same good dynamics will also be observed in the March values as the forecasts presume the large shortage of the jobless claims for the second month running. No doubt, the GB pound should get a support due to the expectancies of these publications and the fact itself, if certainly they come true. Such a confirmation may come even in case of less favorable real layout in the anticipation of the elections as the ruling party greatly needs support.

   The yen is still under the influence of the events, which allow the investors to risk as the talks about the continuation of the global economic recovery and the stock growth based upon positive results of the American corporations caused the yen’s decline. A bit earlier the shares’ price increase at the European venues favored the pressure upon the yen during the European session. Summarizing mentioned above, the yen decreased against all major “opponents”. Meanwhile, the announcements of the state authorities in the “Land of Rising Sun” also provided the pressure upon the yen. The Minister of Finances of Japan N. Khan said in his parliamentary speech that both the central bank and the government should intensify their efforts to strike the inflation and push it out at 2 per cent degree. It assonates to the government idea about the necessity of “money-printing” for the yen resides the rate of 120.0 against the US dollar. Against such a background the probability of another softening in the monetary-crediting policy of the Japanese regulator greatly increases and that it its turn contributed to the pressure on the yen. Obviously, there’s a high probability of further sales of the Japanese currency during the present session as the forecasts concerning the US corporative statements, which are going to be published today, presume reasonably good results.

Analysis prepared by:

Arkady Nagiev
Forex4you analyst