The US dollar turned out to be under pressure all over the “front” on Wednesday. The Greece’s promises contained in the represented deficit shortage schedules and the positive data from Great Britain left a long-expected handle for the profit fixation to the investors in a respectively “calm atmosphere”. Also, the announcements of the FRS functionaries who had claimed that the rates increase was still a matter for the future (for example, the Head of FRS Dallas Fisher) haven’t encouraged the warming up of interest to the American currency. Against that background the “greenback” fixed a minus against all majors as fell down till fortnight minimums against the euro and decreased till two-month ones in concerns of the yen. The economic data concerning the USA were not bad as the capacity of the job places in the private sector payrolls lowered down in February less than expected. As ADP stated the curtailing amounted to -20 thousand while the forecasts presumed to show -50 thousand (after the revised data), whereas in January it was -22.0 thousand; but there was also a revision here, which had declared -60 thousand for January. Exactly this revision of the January data obviously precluded from the optimism occurrence at the market as no response on these employment data followed. The ISM data also turned out to be higher than forecasted. The purchasing managers’ index in the services grew up to 53.0 from 50.5 alongside to the expectances of 51.0. The components of the indicator, which note perspectives, were also remarkable for positive as the new orders index increased to 55.0 against 54.7 in January, and the employment index rose up to 48.6 from 44.6. The US statistics for today may also contribute another portion of positive as the primary jobless claims are expected with the decrease to 480 thousand after 496 thousand before; the manufacturing orders in January – with growth for 1.4 per cent; finally, the outstanding real estate transactions in the same month – with raise for 1.7 per cent. Nevertheless, this very information won’t most likely become the factor of influence at the trades of today, except for a short period perhaps, when the European CBs’ commentaries and news about Greece sets tune to the market opinion.

EUR
   The Greek state authorities’ plan in concerns of complex of measures aimed to the expenses shortage and the taxes increase, including VAT, premium payments reduction, and state retirement benefits freeze caused a distinct approval form the side of the representatives of the Euro zone countries and Germany first of all. Obviously, the expectances that such measures will contribute 4.8 Billion of euro impress indeed. The euro achieved the levels observed in the end of last month based upon this information, which is of promising nature still yet – it’d be taken into account. The situation resembles the matter when it’s purchased thanks to gossips, but sold at facts, and on this basis there’s a ground for apprehensions that the Greek measures will be implemented adequately, in other words, there’s reasons for disturbance about the issue “Is all well in the Danish Kingdom?” The publicizing of the EU economic data showed less favorable picture than expected – the provision managers’ index for the services of the Euro zone (PMI) fell down lower than forecasted, till 51.8 in February against 52.5 in January, alongside to the expectances of decrease till 52.0 only. The retailing in the Euro countries lowered down in January, according to the information from the Eurostat, the sales shortened for 0.3 per cent m/m and 1.3 per cent y/y. The sales’ curtailing signals distinctly that the steady economic recovery isn’t observed in the Euro zone and no stiffening of the monetary-crediting policy will come from the side of ECB. By the way, this issue will be gone in at large already today as the most important event for the European finances will be the decision concerning the rates and the conference of J.-C. Triche. No changes in the CB’s policy are expected; however, the attention will certainly be focused upon this event. Though, the publication of the statement about the Euro zone GDP estimation for the 4th quarter of last year will precede the announcement of this decision; the former is predicted to be seen with the former characteristics, 0.1 per cent q/q, -2.1 per cent y/y. If any changes appear in the data the market will anyway respond equally i.e., to the side of the appointed amendments.

GBP
   The GB pound rocketed at Wednesday trades and the main support for such a dynamics became the data about the British economy. In the beginning of the session the support for the sterling came from the publication of more positive consumer confidence index from the Nationwide. The February indicator denoted the growth to 80 points against 74 in January. Furthermore, to the supply management data in the services of the United Kingdom in February provided good tunes and the special interest for the “cable”. This branch, as it plays a dominant part in the economy of the country, deeply increased – the purchase managers’ index (PMI) in the services grew up to 58.4 from 54.5 in January when the analysts expected the growth only to 55.5. As it was mentioned in the commentaries the growth occurred due to the enlargement of the new orders, and that in its turn sets mind on the positive perspectives and, respectively, the convincing endowment to GDP of the first quarter. Furthermore, the British currency was supported by the general excitement instigated by the announcement of new stiffening measures of the tax-budgeting policy in Greece. Today news from Great Britain will be represented by the pronouncement of the decision adopted in course of the meeting of the Committee for the Monetary-Crediting Policy of the Bank of England concerning the rates. The change of the rates isn’t expected, but the quantitative softening programs leave the reason for anxieties. The market will be interesting in the probability of their capacity increase and the time constraints of its realization and also time framing of their implementation. Any prolongation and increase as for that question will provoke the wave of the sales-outs of the sterling.

JPY
   The yen continued its growth against the US dollar on Wednesday due to pains of the Japanese exporters selling their foreign currency revenue. Besides, the decreasing long-term rates, amidst the collapse of the American T-Bonds’ profitability, lessened the attractiveness of the US dollar assets, which are traditionally bought by the majority of the Japanese investors. The data published today afforded grounds for doubts in concerns of the Japanese economy’s rapid recovery as the data for the 4th quarter denoted the shortage of expenses by the Japanese companies, at that it’s already the 11th quarter running. The capital outlays shortened for 18.5 per cent on an annualized base after the downfall in the previous quarter for 25.7 per cent. At that it was pointed to the perspectives of this process’ lasting as the companies’ sales shortened in the previous quarter for 3.1 per cent since the decrease for 15.7 per cent in the 3rd quarter of 2009. Concerning the nearest perspectives as for the pair of USD/JPY, as it seems, the approach of such event as the Labor Report in the USA will instigate the evening-up of the instrument. The earlier opened short positions as for the US dollar will be closing and that will enforce the “buck”, moreover the prices, to which the pair has become, 88.00/10, determine a very serious level of support.

Analysis prepared by:

Arkady Nagiev
Forex4you analyst