The total fracture was a proper reflection of the investors’ attitude at the session on Thursday. The US Dollar again gained confidently to all its “opponents” except for the Yen, which was the favorite asset of the yesterday trades on the contrary. The perfect meltdown of the US Fund Market, where Dow Jones showed -1000 points at some time, added to another defaults. The mass media chalked it up to the human element. It’s difficult to check my all means, but the hints on the possible revision of some dealings at the US Stock Exchanges stir up the same opinion. The disorders in Greece went ahead increasing the investors’ disturbance the state authorities would never implement the measures of the tax-budgeting restructuring. At the same time the expectance of the elections’ result from Great Britain took to a new higher level the concerns about the “hung” parliament. These factors reasoned the escalation of the departure out of risks and supported the US Dollar, of course. The European troubles put on the back burner the represented data on the US economy, which stated the number of the primary jobless claims lowered down for 7 thousand till 444 thousand in the USA, while the forecasts expected the decrease for 8 thousand. The shortage is being observed for the third week running, and that is certainly a good sign for the gradual recovery of the labor market. Moreover, it’s also properly confirmed with the curtailing of the secondary claims for -59 thousand, while the total capacity sank down till 4 594 against 4 653 thousand a week before. The B. Bernankey’s speech wasn’t interesting for the investors as well. The current news set is very significant and stirs great interest of course. The April US Labor Report is going to be published. The forecast predicts the raise of the Non-Farm Payrolls for 183 thousand since after 162 thousand in March, whereas the unemployment rate is foreseen at the former rate of 9.7%. Despite this favorable value appeared due to the state recruitment population census, it keeps positive attitude by all means. That’s why the US Dollar will probably go on its enforcement today as well. However, it will be also reasonable to consider the attractive terms for the profit fixation.

   The Euro sank down till the new minimum to the US Dollar. The common currency was noted last at these rates last March. The Greek matters and the apprehensions that some of the Euro zone’s countries, for example, Spain and Portugal, will add to the negative of the kind as they also undergo hardship as for tax-budgeting issues, still stayed the main cause for the sale-off of the Euro. The hopes for ECB would suggest any news steps for over passing of the Euro zone’s national debt crisis thereupon the pronouncement of the monetary-crediting policy’s decisions failed to come true. ECB kept its main interest rate unchangeable at the former degree of 1.0%. J.-C. Triche tried to reason a fear away as for the possibility of default. However, that has never conceived the investors and the Euro sales went on with former intensity. The report, that the Greece’s Parliament had approved the governmental draft bill about new austerity within the commodity stabilization agreement with EU and IMF and so had opened a gate for the country to gaining the credits from these institutions, didn’t lessen the pressure on the Euro. The represented data on the German manufacturing orders in March turned out to be at a very high rate, 5.0% m/m, 26.1% y/y, though they didn’t make any influence upon the market in such environment, of course. There’s going to be not much economic information. The only data on the March manufacturing in Germany will be published: here the production increase is expected for 1.5% m/m and 6.3% y/y, though there’s no reason to wait for the support to the Euro due to these values as the main influencing factors are still the same – the Euro zone’s national debts and the labor news from the USA. By the way, it’s better to remember about the today meeting of the Ministers of Finances of the Euro zone’s countries targeting the approval of the plans of aide for Greece as this item exactly may lessen the pressure on the Euro to some degree.

   Likely to the Euro the British Pound was under a great pressure at the Thursday session and fixed a solid loss to the US Dollar and Yen. Beside the common fears of defaults in the Continental countries the domestic troubles connected to the parliamentary election also pressed on the Sterling. Yesterday the general voting was in Great Britain, and the GB Pound was under the sales pressure as the exit-polls data brought word proving the apprehensions of ineffective parliament in the country, because neither of the Parties was going to get the majority in the House of Commons. As known, the prospects of the kind mean the troubles of forming the Government, what in its turn will keep threatening of the downgrading of the national crediting rating, which is at the AAA level still at the moment. The economic data also poured “oil into the flame”. The yesterday represented purchasing managers’ index (PMI) for the British services suddenly decreased and made 55.32 in April against 56.5 alongside to the expectances of 57.0. Today the British news is dedicated to the price dynamics. According to the data from the Halifax, the home price increase is predicted: the index will probably show +0.6% in April. The producing prices will also be higher than before – for 1.0% m/m, 12.9% y/y by procurement and for 0.6% m/m, 4.8% y/y by requisition. The inflation increase goes ahead in Great Britain and that certainly might support the Sterling today, though it’s unlikely to occur in the current political environment and also due to expecting the Main Labor Report in the USA. Even though it occurs it will be for a while only. So the Sterling will obviously stay under the pressure still yet.

   As the phrase goes, “right off the bat” – this is the best way to describe the Yen’s climate, which since after the “Gold Week” celebration in Japan rapidly gained to all majors in the first business day. Beside the Yen’s purchases by the Japanese traders at the markets abroad, the popularity of the currency of Japan was reasoned with the sudden departure out of risk as the closing of the positions previously opened using borrowed assets, in other words, “carry trade”. The meltdown of the American Fund Indexes approximated the volatility to its maximum levels as the Dow Jones showed -1000 points at some time. As it turned out later, the fatal blow to the assets was delivered by the traders’ mistakes; however it should be investigated yet. The present session can but back everything. The Yen is very susceptible to the good news from the USA: if the Main Labor Report shows a steady positive environment the currency of “The Land of Rising Sun” will quite possibly get back to the levels, whence its advance to the US Dollar began at the session in Thursday.

Analysis prepared by:

Arkady Nagiev
Forex4you analyst