The US dollar reclaimed its leadership at the market on Thursday and resulting the session enforced itself all over the “front”. Quite not bad employment data for last week elated the investors in concerns of the “greenback” purchases. However, the main support for the “buck”, as it seems to be, was provided with the information from the Europe about the decrease of the rating of the Deutsche Bank AG by the Moody’s Agency. Besides, the raise of the interest to the euro wasn’t also favored due to the disorders in Greece where the population doesn’t share the opinion of both the states authorities and ECB as for the necessity of the budgeting and monetary policy’s stiffening. The US economic data published the former session appointed to the improvement of the employment affairs, and that possibly became a landmark moment in the anticipation of the main labor report’s publicizing, which is going to occur today. The number of the primary jobless appeals for the previous week lowered down for 29 thousand, till 469 thousand. Alongside to it, the capacity of the secondary appeals also decreased for 134 thousand amounting the general number till 4 500 thousand persons, and that became the least level for more than a year, starting from January 2009. Besides, the data of the manufacturing orders in January may be also ranked among positive. This indicator has demonstrated growth lower than expected as by forecasts of the orders’ increase for 2.0 per cent in January it was fixed in fact the raise for 1.7 per cent only as compared to December. The rest of the US economic statistics represented the negative results as the payroll costs in the 4th quarter according to the revised estimation turned out to be worse than before, -5.9 per cent alongside to -4.4 per cent earlier, and the signed accommodation sales contracts’ index lowered down for 7.6 per cent in January, till 90.4 compared to 97.8 in December. The cause for it is supposed to be the “extreme weather conditions”. The forecasts predicted the growth of the signed contracts’ index for 0.5 per cent. The news set for today brings very significant information, as usually for the first Friday of a month, including the US Labor Report for the former month i.e., February this time. The forecasts presume quite a great spread as it’s expected that the nonfarm payrolls number had shortened for 25/30-70 thousand, and the unemployment level grown up to 9.8-9.9 per cent from 9.7 per cent fixed in January. If the results turn out to be worse the US dollar may become a leader of the sales. Later to the complete of the session the consumer crediting data for January are going to be published: here more sufficient curtail than observed in December is expected, -3.8/-4.5 Billion of dollar whereas it was -1.7 per cent in last month of the former year.

EUR
   The common European currency turned to be under the pressure again and lost its achievements against the US dollar, which were made on Wednesday amidst some positive “raylets” in the Greek troubles issues’ solving. The report that the Moody’s Rating Agency had decreased the rating of one of the largest banks of the Europe and the world, Deutsche Bank AG brought back on the agenda the apprehensions in concerns of the Euro zone banking sector and also strengthened the disturbance as for its budgeting –taxation area. Moreover, the troubles concerning the debt of Greece, as it has already become clear, are not as easy for the shooting as it had been thought before. The population of this Balkan country has felt no pinky cheer of the prospects to loose some part of incomes and pulls off mob violence in the Athens. The ECB decision yielded no surprise as the key rates were kept at the previous level of 1.0 per cent, moreover, nothing was declared in concerns of the special measures. Meanwhile, the Head of the European CB J.-C. Triche assured the investors that no liquidities’ curtail for the Euro zone was scheduled at that stage and the ECB would continue render to the banks the liquidities as much as they needed. Both the decision of the European regulator and the claims of J.-C. Triche have made no influence upon the market. The publication of the final estimation of the Euro zone’s GDP for the 4th quarter, which preceded the pronouncement of the above mentioned decision, has also noted no changes. The main indicator’s results stayed within the extremes of the advancing evaluation, +0.1 per cent q/q and -2.1 per cent y/y; the analysts’ predictions about the GDP for the 1st quarter of this year were resolved to the expectances of an insignificant increase. The EU news going to be published today will be represented with the manufacturing orders in Germany for January. The forecast presumes the impressive raise, 1.1 per cent m/m, 15.5 per cent y/y after -2.3 per cent m/m, 8.4 per cent y/y for the previous period. Of course, it will be taken into account at the market, though won’t make any influence upon the development of the market events as the investors will be looking forward for the news about the labor market’s affairs from the USA.

GBP
   The decision of the Bank of England concerning the rates published on Thursday was the same neutral as of the Euro zone’s CB – the rates were kept at the previous level but the rejection of the British regulator from widening of the Bonds Relief Program of stocks purchase called quantitative softening provided some support to the GB pound as some part of the investors expected its increasing. The GB’s pound made an effort to grow, but the general opinion directed to the side of warming up the interest to the US dollar, and the report about the rating decrease of the largest bank in Germany provided the pressure upon the sterling, which as a result demonstrated a negative total against the “buck” at the previous session. Moreover, the data of the home market from the Halifax didn’t favored the special interest concerning the “cable” as the housing prices fell down in February from June of last year for the first time. The home prices index lowered down in February for 1.5 per cent m/m and grew up for 4.5 per cent y/y, at that the growth was expected for 0.4 per cent m/m and raise to 5.0 per cent in annual comparison. The January data were more optimistic – the index increased for 0.6 per cent m/m, and 3.6 per cent y/y. Today news will demonstrated the dynamics of the manufacturing inflation in the “Isles”; the producers’ prices indexes (PPI) for February are predicted with growth – at entrance 0.8 per cent m/m, 8.1 per cent y/y, at exit 0.3 per cent m/m, 4.1 per cent y/y. the continuing growth of the transfer prices (at entry) may disturb the investors, but it seems not to find reflections in the currency market prices as BoE has already expressed its opinion for the near outlines, and the main influencing factor for today will still be the US Labor Report.

JPY
   The Japanese yen collapsed against the US dollar at the last session. Obviously, the investors continued positions’ leveling before publication of the employment report in the USA, which is going to be represented today. Besides, the anxieties and afterwards also the announcements that the Bank of Japan may adopt additional steps for softening of its currency policy pressed upon the Japanese currency. The perspectives of capacities’ increase higher than planed level of 10 Trillion of yen instigates the Japanese financial assets’ sales. At the same time there’s pessimism among the Japanese analysts as for the effect of the measures adopted by the Japanese regulator as it’s expected that money demand from the side of the banks stays low because there’s too little factual consumer for cheap credits in Japan at the moment. Today positions of the Japanese currency will be under the influence of the information from the USA about the employment dynamics. The last economists’ forecasts are resolved to the expectations that the largest global economy lost about 25-27 thousand payrolls in February; and resulting the above mentioned the unemployment level come to 9.8-9.9 per cent. The significant increase is connected to the hardest possible snowfalls, which occurred in the United States. At the same time, if the data turn out to be better than the forecast the yen will continue its decrease.

Analysis prepared by:

Arkady Nagiev
Forex4you analyst