13 January 2010
The US dollar was traded multidirectional on Tuesday session…
The US dollar was traded multidirectional on Tuesday session; the support to the American currency was provided with the information from China about the increase of the requirements as for the banking reserves by the Central Bank of “the Celestial” that is a feature of the stiffening of the monetary-crediting policy. It has obviously decreased the investors’ risks inclination and enlarged the volumes of the “greenback” purchases. Moreover, the Alcoa’s income statement disappointing by reason of loss has also provided the risks inclination’s curtailing. The feeble report of the US corporation effected the ambiguity at the market together with the apprehensions that the started income reports’ period will be dull. It seems to be that on a broader scale the market is trying to find its position in concerns of the dollar’s driver – either the expectations of the US monetary policy’s stiffening amidst the favorable data or the risks inclination that becoming the principal factor again. Judging from the market responses having been observed recently the main guidance to operations is by all means the risks inclination again. The US economic news was represented with the data of the foreign trade. The United States’ trading balance deficit grew up more tan in expected in November. In accordance with the represented data the deficit increased for 9.7 per cent till 36.4 Billion of dollar from 33.19 Billion of dollar a month before. The October indicator was revised to the side of increase. It has been announced before that the October deficit was at the rate of 32.9 Billion of dollar. The forecasts presupposed the negative totals would rise in November to 34.7 Billion of dollar only. The US economic news going to be publicized today are represented with the FRS Report “The Beige Book” where the state of affairs in the US regions will be covered; besides, the interest will also be attracted to the data of the petrol and its products supply. The weak intension of the economic schedule both in the USA and the Europe reason the high probability of quiet conditions at the market and as follows the ranging nature of the trading.
EUR
The common currency became the only “opponent” to the US dollar among the main once being suffered on Tuesday session as the results of the day appeared to be in minus for the euro in its controversy to the “bugs”. The euro has decreased amidst the risks inclination’s downfall marked by the lowering down of the stock indexes at the venues of the Europe and also gold and petrol prices falling down. The “ideological begetter” for the risks inclination’s decrease became the information from China about quicker than expected stiffening of the fiscal policy and also the opinion about the readiness of the US dollar for the u-turn to the side of enforcement. No significant statistics form the Euro zone was settled for the publication, and the news background was represented with the data about Germany. The number of the corporative collapses in the EU largest economy grew up for 15.9 per cent y/y, and this very result has appeared to better than the September one when the bankruptcies’ capacity increased for 17.4 per cent y/y. Furthermore, the German Industrial Association VDMA has announced the rapid decrease of the new order’s capacity for the machine-building industry of the country. The production orders fell down for 12 per cent y/y in November, where as in October they curtailed for 29 per cent. This industrial branch is the basis of the German economy, and the like dynamics proves the sufficient shift to the positive side. The November data about the manufacturing in the Euro zone will be publicized, the forecast predict the growth for 0.6 per cent m/m and the downfall tempos’ retard till -7.5 per cent y/y per annum while it has been observed -0.6 per cent m/m, -11.1 per cent y/y in the previous period. The data about this indicator will probably support the common currency on Wednesday trading better than the forecast; though the market seems to prefer the ranging trade ahead of the ECB meeting concerning the rates.
GBP
The British pound fixed quite decisive preference against the dollar summarizing the trades on Wednesday. The support for the sterling has provided by the foreign trading data and the report of the British Retailing Consortium (BRC). The deficit in the foreign trading of Great Britain decreased in November, at that it happened due to the growth of export and lowering down of import, what may be considered the positive dynamics for this sector of the British economy. In accordance with the represented data the deficit curtailed in November to 6.8 Billion of pound against 7.0 Billion of pound in October following the revised data as it had run about -7.1 Billion of pound before. The deficit of the last autumn month became the lowest starting from last summer; the forecasts presumed the negative total would shorten till -7.0 Billion of pound. The BRC retailing report demonstrated the steady growth in December for 4.2 per cent y/y after 1.8 per cent y/y before. Today news tape as for the economy of the “Isles” will enlighten the November state of affairs in the British manufacturing and its processing sector especially. The forecasts predict the growth in the manufacturing in general for 0.3 per cent m/m and -6.1 per cent y/y after 0.0 per cent m/m and -8.4 per cent y/y; and also in the processing sector 0.3 per cent m/m and -5.1 per cent y/y against 0.0 per cent m/m and -7.8 per cent y/y before. This perspective may afford some extra support to the GB pound and cause the lasting of its growth. However, the raise of the political ambiguity in the country together with the technical factors determined with the fact of strong resistances at the pair of GBP/USD may integrate some corrective amendments and instigate the lateral trading.
JPY
The Japanese currency grew up against all majors on Wednesday trading. The market has recalled the yen as the best shelter-currency during the time of the downfall of the willing to risk provoked by the stiffening of the monetary-crediting policy in China together with the stock markets’ dullness. Whereas the “bugs” decrease against the yen was caused by the lasting decrease of the US T-Bonds’ profitability. The profitability of the biennial bonds has fallen down lower than 1.0 per cent and as for the ten-year ones – till 3.73 per cent. The economic indicators as for Japan are behindhand of impressive dynamics up to the current moment. Nevertheless, the economic observers’ indexes published on Tuesday and demonstrating the mood of the Japanese production men increased for 1.5 point till 35.4 in December after the downfall to 33.9 in November. The stimulus for the indicator’s increase was the encouraging measures from the side of the government – the taxes cut. Today news set has the advancing data about the orders in the machine-building branch in December and the information about the Japanese companies’ collapses. As usual the macro statistics will make no influence upon the yen’s positions; the market will further be conversant in the situation determining the level of the willing to risk.
Analysis prepared by:
Arkady Nagiev
Forex4you analyst
