In the early days of the trading week the U.S. currency has failed to recover from the effect of the employment data Friday and continued to take positions against major competitors. In the absence of important economic news by region, representing the major currency pairs, come to the fore leading financiers, as well as other promising from the viewpoint of global economic markets.
In particular, the attention of investors attracted by the economic situation in China: Chinese exports in December grew by 17,7%, while the experts had expected progress is not more than 4%. This result is particularly noteworthy in light of the fact that in November the index recorded a decrease of 1,2%. At the same time, imports increased by 55,9%, while the projected growth of only 31%. Investors also interpreted these data as another signal for reviving the global economy, however, there are views and that the global economic system can cope with the crisis faster than its largest representative - the United States.
In turn, the People”s Bank of China pledged to increase the compulsory reserve deposits of rules to keep the economy from potential overheating. In addition to this reminded me of Greece, the budget deficit which is still repulsive factor in the desire of investors to take risks. Thus, in the first two working days, the euro /dollar does not go beyond channel 1.4550 - 1.4450, the pound /dollar was traded between 1.6200 and 1.6060. Dollar /yen has broken away from the resistance 92,50, and breaking the meaningful support 92,00, 91,50 firmly entrenched below. The dollar /franc tested the resistance of 1.0200.
However, fundamental data and comments by leading economists somewhat changed the situation on Wednesday. In particular, a member of the Committee on Monetary Policy Bank of England”s Andrew Sentans noted that 200 billion pounds allocated to the UK economy within the framework of “quantitative easing”, together with a decrease in the basicinterest rate to a record level of 0.5% and changes in the tax sector provided substantial assistance to the national economy. Among other things, it was noted that the Committee plans to expand its program of buying assets. Economic statistics provided additional support for the pound: the volume of industrial production in the country increased by 0,4% (forecast 0,3%).
Data on changes in GDP in Germany was not shaken confidence risk takers: -0,5% in the forecast -4,8% and the previous value of 1.3%. As a result, the euro updated weekly maximum, which amounted to 1.4578, but then returned to the level of 1,45. Pound was more stable, steadily breaking the 1.62 level upwards, and then continued to strengthen, updating, and also the maximum value for the week of 1.6305. Couples dollar /yen and dollar /franc continued to test the previously mentioned resistance (91,50 and 1.0200, respectively).
On Thursday, the U.S. dollar was trying to strengthen its position in relation to major competitors. Ctoit noted that the waiting of my head of the ECB Jean-Claude Trichet, investors barely reacted to the published in Europe and the U.S. economic statistics.
nabolee One of the issues discussed at the conference was the problem of Greece: for today the country”s budget deficit was almost 4 times higher than the norm prescribed by the EU (12,7% vs 3%, respectively). The opinion of Mr. Trichet, on this occasion could hardly support the single currency and attract investors to trade in risky assets: according to him, neither Greece nor any other country, are experiencing financial difficulties, could not count on any special assistance from the Bank. Thus, the increased anxiety in Athens, together with concerns about Portugal and other peripheral states have considerable pressure on the euro. Among other things, the main European financier, said that the recovery of the European economy will be gradual and uneven, because the recession turned out to be very serious.
Regarding interest rates, then, according to experts, the current level is acceptable for the current situation and possible increase will be held no earlier than in the second half of 2010. Recall that the ECB left rates at the same level of 1,00%.
On Friday, the situation on the currency market continues to depend on investor sentiment, in particular, fears of Greece, “the Achilles heel of the Eurozone have intensified the tension among traders, pressuring the euro. At the same time, the Greek government presented a plan to reduce the budget deficit to 3% (the current level of 12,7%) was received with skepticism. Moreover, the list of potentially vulnerable states also came Portugal and Ireland. Weakened the position of the single currency and other interesting news: In Rumors about the possible resignation of Chancellor Angela Merkel. Despite the fact that Ms. Merkel has denied these allegations, calling them “absurd”, the fall of the euro against major rivals continued. Thus, over the past two days working week the euro /dollar trading in the region of 1.4550, went below 1.4350.
was unable to hold their positions and the British pound. Fortifying up Thursday to the level of 1.6340 on Friday pair GBP /USD, despite the opening up began a systematic reduction. Having broken the level of 1.6300, the pound was almost touched 1.62, but the correction before the end of trading allowed “British” to finish trading at 1.6270 area.
dollar /franc, making the first attempt to break the resistance of 1.0200 on Thursday, still succeeded on Friday. Fortifying above this level, USD /CHF has moved steadily upwards, updated weekly maximum of 1.0285.
In contrast to European currencies, the yen has strengthened its position. For example, USD /JPY, testing the support of 91.00 on Thursday, was able to reach a new week low Friday, 90.58.
forecast for the week
Next week traders will appreciate the abundance of economic news. Thus, in the course of the Japanese currency may affect the speech of the Bank of Japan Governor Shirakawa, as well as data on the change in industrial production. In the euro area and Germany will be published indexes of business activity in the service sector and manufacturing sector. German economists disclose changes in import prices and the index of business sentiment from the institute ZEW. Looks and an impressive list of information whose publication is planned in the UK: Consumer and retail prices, unemployment, monetary aggregates M4, the change in volume of retail trade, as well as the minutes of the meeting of the Committee on Monetary Policy Bank of England. Bank of Canada, in turn, will announce key interest rates, and in New Zealand will release data on changes in the volume of retail trade. In the United States should pay attention to the producer price index, on total net purchases of U.S. securities by foreign investors, as well as data on the housing sector.
Thus, the euro /dollar can move in the range 1,4500-1,4100, British pound, the most likely will be traded between 1.5900 and 1.6400. Movement of the dollar /yen will be limited to levels of 89,50 and 92,50, and variations pair dollar /franc will occur within the channel 1,0100-1,0400.
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