The US dollar enforced against the euro again, but declined to the GB pound. Such dynamics has already been observed for almost all this week. The like steadiness is still caused by the same factors – the Greek debt troubles, which further press on the euro, and also the good economic statistics in Great Britain, which helps the sterling to feel confident during the recent sessions. There was no US economic statistics again. At the same time the United States corporative statements are represented at the market, and they actually demonstrate splendid results in all economic branches. The earnings per share (EPS) surmount both the forecasts and the results of the previous period. Such a development of events may probably determine the anticipation of that period when FRS will start to think hard over the necessity of stiffening of its monetary policy. However, the employment is decisive concerning this matter – if the labor market’s indicators begin to demonstrate the improvement of the situation in the near future the reasonable grounds for the quick stiffening of the monetary policy will appear. Today the news set as for the economy of the USA is quite substantial and it provides enough essential information. The March manufacturing inflation is going to be represented to the market. The general producers’ prices index (PPI) is expected with a sudden advance, 0.4 per cent m/m, 6.1 per cent y/y since after -0.6 per cent m/m, 4.4 per cent y/y – it’s actually one more “dig” at the expectances of the interest rates’ increase. However, the smoothing moment is by all means: the core index never demonstrates such a vivid dynamics as it’s expected for 0.1 per cent m/m and 0.9 per cent y/y only. Furthermore, the changes of the capacity of the jobless claims: both the preliminary and the secondary ones are expected with the decrease, moreover, the preliminary might be 35 thousand less. The March ready home market sales’ results are going to be publicized. The rapid increase is expected here as well. The sales will probably rise till 5.28 Million from 5.02 Million before. It should also be mentioned that the macro indicators are colored vividly favorable for the US dollar, in the forecast version anyway. If the expectances come true the “greenback” may get reasonably essential support.

   The initiated negotiations between the Greek authorities and the representatives of EU and IMF strengthened the numerous uncertainties concerning the euro’s perspectives even more. The investors’ concerns reflected at the loan market’s rates, where the spreads between the profitability of 10-year Greek and German bonds up-rocketed again and surpassed 5.0 per cent already. It certainly pressed on the euro a bit more, and this currency sank till 1.3350/60 and also approached to its local minimums against the US dollar. The advance of the stock indexes in the USA amidst good corporative statements has never stimulated the investors to purchase the high profitable euro as it usually happens. The market is looking forward for the outcome of the debts obligations of Greece still yet, but also the rest of the European countries while following this example, as the probability of such troubles as for some other members of the European block is still high. Yesterday no EU economic news was published; though today the purchasing managers’ indexes (PMI) both for the manufacturing and services in the Euro zone in general and in Germany are going to be represented. The next PMI estimation is expected to show the advance in April – from 56.6 to 56.8 in the manufacturing and till 54.5 against 54.1 in the services in the Euro zone; at the same time for Germany the changes are expected for the services only – from 54.9 to 55.2, while in the manufacturing it will be still 60.2. The appearance of the Head of EECB J.-C. Triche might also be essential. Though, as it seems, the news from the negotiations of EU and IMF is still the decisive factors of influence as this result might stamp its mark on the positions of the common currency.

   The British sterling further gets the support from the side of the economic data, which steadily demonstrate the positive dynamics, which encourages opinion about the real features of the economic recovery. The surprisingly positive report about the employment in Great Britain, which surpassed the forecasts, warmed up the investors’ interest to the purchases of the “cable”. The March shortage of the jobless’ capacity for 32.9 thousand alongside to the expectances of -15.0 thousand and also the revision of the February indicator to -40.1 thousand since -32.3 thousand has impressed the market. The decrease of unemployment for the second month running may quite probably be considered as more essential economic recovery than predicted before. The prospects of the demand’s raise were also determined in the data that depicted the increase of the average salary in Great Britain. The BoE minutes also contributed to positive as they marked the unanimity of opinions of the Committee representatives, and also brought “hawkish” tunes, which mean that the Bank will rather quicken than postpone the starting terms of the monetary stiffening. The inflation data, which were represented on Tuesday, also encourage the opinion of this kind. Nevertheless, the GB pound turned out to be under some pressure and lost some portion of achieved positions. The results of recent polls obviously became the negatively influencing factor as they point to the probability of the situation, when neither of the parties will possess the majority of the parliamentary seats in the result of the elections. As known, this aspect has already been disturbing the market for a long time and also instigated the sales-outs of the “cables”. Today the news set has a lot of significant information. However, taking into account the forecasts, the GB pound may stay alone without any support as the volume of the assets borrowed in the state sector in March is expected with an essential increase, till 24.2 Billion since after 12.4 Billion of pound; the March retailing is predicted to be seen with the shortage compared to the previous indicators, 0.7 per cent m/m, 2.3 per cent y/y, since after 2.1 per cent m/m, 3.5 per cent y/y, while the money supply is going to be wit some squeeze. Though, there’s also a positive part of information – the CBI manufacturing orders report for March is going to demonstrate -31 thereupon -37, while the approved mortgage appeals will increase till 50 thousand from 48 thousand. The equal between positive and negative is certainly possible, and the maintenance of the positive tone as for the sterling might reason the further advance.

   The currency of Japan has still kept itself within the narrow range at the previous session. The raise of the ambiguity obviously encouraged the investors to make a pause for getting new checkpoints. The speech of the Deputy-Governor of the Bank of Japan K. Nisimura that the Central Bank didn’t shut out any variant of acting made no influence upon the market. The pressure on the Bank of Japan targeting to incline to further enlargement of softening its monetary-crediting policy is lasting; though there’s no steps in fact, and that neglects a bit a pressure on the yen. The data, which have already been published today, stated the increase of the foreign trading balance’s surplus in March. The advance was significant as the totals increased to 666.2 Billion since after 470.5 Billion of yen before. It has enforced the yen a little in the beginning of the session, though the long-termed supporting influence is less probable. Most likely, the Japanese currency will continue the trades within the range again as the purchases from the side of exporters.

Analysis prepared by:

Arkady Nagiev
Forex4you analyst