8 January 2010
The American currency recovered all its losses sustained on Wednesday session…
The American currency recovered all its losses sustained on Wednesday session and enforced its positions as for the yen even more. The economic data from the continental Europe less favorable than expected and the hints on the possibility of the political turmoil in Great Britain afforded grounds to the investors for the special interest to the “greenback” having not only neglected the recent losses but also fixed the “profit” to the GB pound and euro summarizing the trades on Thursday. The support for the “bugs” was also provided by the domestic economic statistics where more encouraging data of the redundant payment appeals afforded grounds to presuppose the Labor Report going to be announced on Friday being better than forecasted. In accordance with the information from the US official sources the number of the preliminary redundant payment appeals increased last week, though much less than expected – for 1 thousand only, till 434 thousand; at that the enlargement had been expected for 8 thousand. Meanwhile, the capacity of the secondary appeal fell down for 179 thousand and the total “jobless army” made 4 802 thousand showing the least possible meaning starting from the beginning of the previous year. The news sent of the current day is long-awaited and contains very significant information. First of all it’s the Labor Report for December as the market is looking forward for seeing the minimal curtail of job places in December (-2.0 thousand) or the absence of lost even more after -11.0 thousand in November, and the unemployment level won’t be exceeded to negative alternations. If the forecasts come true or appear to be better even more the dollar will continue its raise, and the market players will determine the tendency. The opinions concerning the probable stiffening of the monetary-crediting policy in the USA will gain some extra feeding despite the neutral information got from the FOMC last meeting’s minutes.
EUR
The negative surprise concerning the retailing in the Euro zone for November has made a significant support to “bears” as for the euro; the common currency decreased against the dollar and the GB pound and also denoted inconclusive dynamics against the yen at the Thursday trades. The retailing in the countries of the euro block in last November demonstrated the record decrease to 1.2 per cent m/m, and to 4.0 per cent y/y. The forecasts reduced to the opinion the retailing was to increase for 0.3 per cent m/m, and fell down for 1.8 per cent y/y. The result of the Eurostat EU statistics agency report has diminished the hopes that the consumer expenses would help to support the started economic recovery of the Euro zone. The December "sentiment" indexes published together with this information demonstrated the growth, though they weren’t able to change the impressions effected to the market by the negative of the retailing. In accordance with the represented data the economic confidence index increased rapidly to 91.3 against 88.8 earlier, and the mood indexes increased in the manufacturing to -16 from -19 a month earlier, and in the services to -3 from -4. The general consumer mood index increased to -16 from -17 and the EU business behavior index – till -1.22 after -1.53 in November. The processing industry orders in Germany also increased in November for 0.2 per cent m/m though became worse than forecasted as the growth was expected to 1.4 per cent. Concerning the news going to be represented today – the steadfast attention will be put on the final remark of GDP of the Euro zone for the 3rd quarter; the preliminary data fixed 0.4 per cent q/q, -4.4 per cent y/y, and no changes are expected; and also on the unemployment level as the growth is expected to be seen for 0.1 per cent till 9.9 per cent. The manufacturing data from Germany for November are also very interesting, the growth is expected here to 1.0 per cent m/m, -8.0 per cent y/y, after the default before till -1.8 per cent m/m, -12.4 per cent y/y. The already announced data as for the foreign economic relationship of Germany in November, both payment and trading balances have denoted the confidently positive dynamics together with the impressive growth of the surplus. However, this information is ignored by the market and as it seems, until the publication of the US Labor Report, the investors don’t intend to react to any news.
GBP
The British currency decreased against the dollar on Thursday trading as the hints on the probability of the political turmoil in Great Britain caused by the gossips about the attempts to settle the ballot box for insinuating the G. Brown’s leadership and sabotaging the positions of the Prime-Minister have caused the downfall of the GB pound. The Halifax housing prices index grew up for 1.0 per cent m/m and 1.1 per cent y/y in December. The indicators’ raise has been observed for sixth month running already as in November the index rose for 1.3 per cent m/m and lowered down for 1.6 per cent y/y. The forecasts expected the increase for 0.5 per cent m/m only. The BoE minutes have burdened no negative potential for the sterling; the Committee for Monetary-Crediting Policy left the capacity of the Bonds Relief Program at 200 Billion of pound and maintained the rates at 0.5 per cent summarizing the meeting on Thursday. This decision was anticipated and conceived by the market neutrally of course. The news going to be publicized today will concern the manufacturing inflation in Great Britain, the producers’ prices index both at entrance and exit are presumed with growth in an annual comparison, at that the increase is quite rapid – till 6.1 per cent y/y, 3.1 per cent y/y respectively, after 4.0 per cent y/y, 2.9 per cent y/y. as like as not that such a dynamics can afford the market ground for thinking over how rigid in decision to follow the velvet policy can be the Bank of England and if it gives no reason for the revision of these positions either. To say it English this price statistics can be favorable for the sterling.
JPY
The era in the approach of the Japanese Government to the national currency policy can obviously be considered started with the advent of the new Minister of Finances of Japan N. Khan. Just in the first day of his job at the position N. Khan announced his willing of weakening of the yen and appointed the rates, which the yen should be decreased to evermore; for its rate to coincide with the business’ interests and provide the favorable conditions for business’ delivery up to the current moment. The Minister has appointed the rate of 95.0 as next to it he’d like to observe the trading as for the pair of USD/JPY – it’s almost 3.0 per cent higher than the current rates. The “bears’ emptyings” concerning the yen got amidst these very announcements was being maintained almost for the whole session, and the yen has fallen down till 93.40 having lost more than 100 points per day. This very mood will obviously continue its predominance in concerns of the yen today as well. However, as it seems until the representation of the US news the warming up of the sales is less probable; on the contrary some decrease of the USD/JPY pair is most likely worth to be expected as the market will position itself to the publication of the employment data in the USA and also fix the profit after the impressive increase utilizing this very instrument.
Analysis prepared by:
Arkady Nagiev
Forex4you analyst
<< Back to "Fundamental analysis"
