The beginning of the trades on Monday was still on the US dollar sales against the Europeans. The investors obviously maintained the inclination to risk due to the impressions of the satisfactory US Labor Report published on Friday and also the announcements of the President of France concerning the readiness to render the aid for Greece. Later on, however, the market has decided to fix the profit as for the short positions against the “buck” amidst the absence of any significant news form the world regions and the apprehensions about the European countries’ debts, which are greatly maintained still yet; that’s why the US dollar has completed the first day of the current week with the growth against both the euro and GB pound. The “buck” has fixed the profit the neutral result in its controversy to the yen, while the trading at this pair was dull and carried within a very narrow range. As mentioned before there was no US economic news. The news set of this day is also going to be little less than fruitful as the economic optimism index from IBD/TIPP will be represented for February while the forecast predicts the improvement till 48.9 points after 46.8 in January. These data will make no influence upon the market. In all appearances, the present situation at the market will be remarkable for the ranging trades as it will further seek for the trading checkpoints. Concerning the prospects they seem to be on the US dollar’s recovery of its own predominant positions.
EUR
The common currency was traded on Monday amidst the contradictions that determined cardinal changes of the investors’ mood. The announcements of the President of France N. Sarkozy following the results of his meeting with the Greek Prime-Minister on Sunday that the Euro zone countries would lend support to Greece and the peculiar measures aimed to rendering the aid to this country were discussed that moment have afforded grounds for the common currency’s purchasing. However, the remaining doubts, the willing to fix the profit after the sudden increase of the euro, and the uncertainty in the rapid economic recovery restricted the investors and determined the sales of the common currency. As a result, the pair of EUR/USD completed the day at the opening price denoting neutrality. The EU economic data were represented with the information about the manufacturing in Germany in January. The indicator grew up compared to December, though turned out to be less massive than expected. The manufacturing grew up for 0.6 per cent m/m, while forecasted +1.0 per cent m/m. The annual changes were more dynamic, since 0.9 per cent y/y in December the indicator demonstrated +2.2 per cent y/y. No EU economic news are planned to be published today. The euro’s positions will remain under the influence of the political information; from among the debates about the foundation of the European Currency Fund will be interesting. This idea was accepted positively by the state authorities of quite a number of countries, France, for example, whereas ECB responded negatively. This issue will obviously get a shot in the arm in the nearest possible time.
GBP
The British currency suffered much more then other majors at Monday trades. The willing to fix the profit, thereupon the prolonged recovery started on Friday led the pair of GBP/USD to the local maximum at 1.5200, completed in failure together with the attempt of the breakage. The sterling has lost the majority of its achievements made last day of the previous week. There was no economic news from the “Isles” on Monday, and today the information has already favored the continuation of pressure upon the “cable”. The housing prices balance from RICS demonstrated the collapsing falling down till 17 per cent from 32 per cent earlier, but the BRC data demonstrated the improvement in the retailing till 2.2 per cent y/y from -0.7 per cent y/y fixed before, although, that has never become the reason for optimism as the market was focused on the home market data. The news going to be published later on today will lighten the affairs in the foreign trade of Great Britain. As the analysts suppose the weak GB pound has favored the exporters to become more competitive and the trading balance deficit has shortened till 7 Billion from 7.3 Billion of pound. The GB pound’s perspectives are seen in further decrease; however, the cease as a result of the technical factors determining the proximity of very powerful supports is quite possible at the current session.
JPY
The Japanese currency was traded within a very narrow range at the trades on Monday. Obviously, the investors have come across the perplexity what to choose – the inclination to risk, which splash took its beginning on Friday, or the apprehensions concerning the problems in the Euro zone and residing within such a shelter as the yen. Against this background the pair of US dollar/yen completed the day with almost neutral positions to the daily opening prices. The data denoting positive were published in Japan: the payment balance current account’s positive totals of Japan grew up to 899.8 Billion of yen in January alongside to the lasting growth of the export; whereas the forecasts resolved themselves to the surplus amounted to 783.9 Billion of yen. Today statistics continues to demonstrate the growth of the indicators in Japan as the preliminary data for February about the equipment orders reached 217.3 per cent y/y, and the leading indicators index for January – 97.1 per cent against 94.7 per cent. Concerning the perspectives of the Japanese currency the derogation seems to be continued. As already become clear, the Bank of Japan increased the volume of funds aimed for intervention for 5 Trillion of yen. The opinions that the yen should be traded higher than 100, but not less 88.0 are enforced. The dull macroeconomic indicators of Japan and the greatly maintained deflation that threatens the recovery encourage that.
Analysis prepared by:
Arkady Nagiev
Forex4you analyst