Previous week you can probably write to the credit of the U.S. dollar: the currency was achieved several months highs against not one of his competitor.
Beginning week was relatively calm, except for significant breaks on currency pairs with the Japanese yen on rumors of an impending pereutverzhdenii Benjamin Bernanke for a second term as Fed chairman, and attempts to become stronger competitors USD on expectations of favorable data on the GDP of Great Britain and good news from Greece, which tries to solve problems with their debts (Greece”s decision to go for syndicated loans has found the response from the major banks).
clearly strengthening the position of the dollar in the market started on Tuesday when it became known that the Central Bank of China has asked yet some banks to increase their foreign exchange reserves due to the large volume of lending, and others - to stop granting credits to the end of the month. This fundamental data from Europe did not manage to help European currencies. Although the indices of the German research institute Ifo, and were generally better than expected, release of GDP figures for the UK in the 4 th quarter, which was entrusted with so much hope before, definitely disappointed: 0.1 instead of 0.4%, which led to a sharp drop pounds almost 150 points.
At the same time on any news from the U.S. investors reacted to buy dollars: it appealed to him as a currency of refuge in bad data (which, of course, include the dynamics of sales of housing), then recalled the traditional correlation of “good data (eg, an indicator of consumer confidence) - to buy foreign currency.
The main event of the same week was the publication of the U.S. Federal Reserve decision on their interest rates. Interest rates, as predicted, were left unchanged, but the general tone of the Fed statement was positive for the USD, despite the recent release of disappointing economic data - the Fed expressed its intention to adopt a policy of low interest rates for “extended” period of time. Thus, the euro for the first time since July last year, went below 1.4000 and the dollar /franc rose to 1.0524. A pair USD /JPY, which began day above 89.50 and who tried for a while to fall even lower after the release went upstairs and had almost closed above the level of 90 yen per dollar.
If it were not for the handicap, received the British pound during the active trading in Europe, GBP has also completed a day lower, but the words of the representative of the Bank of England that “the economy of the country, perhaps, grew more than the estimates published in the week” led to otboyu pair GBP /USD from 1.6100, and attempt to rise up to 1.6250. However, these speculative British mantras was not destined to operate for a long time: the emergence of markets rational American members of a pound, as other currencies with relatively high base rate began a gradual downward movement and do not deviate from the path chosen before the closing day.
negative expectations for the debts of Greece and Portugal still continued a depressing impact on the traders on Thursday and Friday, keeping the situation tense in the euro area. Even during the Asian trading session Thursday, the euro had dropped to a mark 1.3936, while the Swiss franc noted at 5-month low 1.0554. An attempt to recover the euro led to a maximum of 1.4047, but unfulfilled forecast for German unemployment (8.2%) re-fixed the single currency to the south, and this downward movement continued on and after the release of news in the U.S., where the volume of orders for durable goods increased by only 0 , 3% (estimated 2%), and the number of initial applications for unemployment benefits totaled 470 thousand (estimated 450 thousand).
The FTSE opened up a significant gap in the continued rally in Asian stock markets, triggered by a reaction to Obama”s first ever annual appeal to the U.S. Congress. In the stock has positive things to grow the British currency, even during the European session, the pound reached a week maximum on a mark 1.6274. However, throughout the momentary coming to an end, and after the publication of the rating agency Standard Poor”s that the British banking system can no longer be considered the most stable in the world, the fate of a pound before the end of the week turned out to be foregone conclusion: mark on Thursday at 1.6111 on Friday formed a 3 pound -week low against the dollar at around 1.5982.
single currency on Friday could not even oppose reinforcing the U.S.: data on the change in GDP in the U.S. for the 4 th quarter reflected a growth of 5,7% (forecast 4.8%), which stimulated a new surge of interest in the U.S. currency and threw the euro to a new 6-month minimum of 1.3861.
Japanese yen had shown some capacity in the course of Thursday, it continued its movement and early Friday Asian trading, reaching 89.57 yen to the dollar, but after the statement by the President of the Bank of Japan Masaaki Shirakawa on “a willingness to act decisively in case of threats for financial stability, “the course of the Japanese currency was sharply weakened - traders interpreted this statement as a commitment to currency intervention. Formed a week for at least a mark of 90.90, the yen has completed a week at a compromise level of 90.24.
Swiss National Bank has never been famous rhetorical abilities, comparable to the samurai, the representatives of the bank simply refused to comment after apparent intervention by the French that occurred after 17:20 GMT on Friday, when the course of this irreplaceable currency suddenly found himself at the 4 — monthly minimum - 1.0641 francs per dollar. Complete the sales week for the franc at 1.0604.
forecast for the current week
The next week, most likely, will continue to maintain the attractiveness of U.S. currency, in the direction which traders are turning as if both positive and negative news, with caution.
Snatch up the dollar, which currency is made at the end of the week, quite possibly, be the beginning of the movement of U.S. currency to a more distant goals. Thus, from the level in the medium term will go to the level of 1.3500 euro /dollar (increase will be limited to 1.4000). Moving the pair dollar /franc to a higher trading range of 1.0500-1.1000 and closing at 1.0604 suggests the immediate objective of 1.0700 (as an upper boundary of the channel 1.0500-1.0700) in the way of a pair to 1.1000. The British pound, the whole week traded above 1.6100, but on Friday was able to drastically go down and close to minimume1.5982, thus demonstrating an attempt to escape from the range of 1.6000-1.6500. Pair may continue to fall, and the main resistance remains at 1.6200. Growth USD against the Japanese currency for the week was not so noticeable, but the pair USD /JPY still tried to get closer to the mark of 91.00 and completed the week higher. For this pair continued reduction may result in attempts at verbal intervention by the Treasury and the Bank of Japan, the target for the yen strengthens, we see the level of 88.50, while the upper limit for the pair - the level of 91.50.
However, it should bear in mind that closing the week at the extremes can be fraught with the opening of the market breaks after the weekend, especially given the possibility that members of the news taking place in Davos economic forum.
From the release of economic data scheduled for next week in the first place it should be noted for U.S. data, namely, the employment rate, which, according to preliminary estimates, to demonstrate the positive momentum. In addition, among American news is worth paying attention to the release of the production index of ISM, the data on the volume of outstanding transactions on the sale of housing in the United States, as well as data on changes in the volume of production orders. For Europe, the upcoming week should be a week of bidding, as well as the Bank of England and the ECB will take and publish the decision on the basic interest rates. The example of European central banks will follow and the Reserve Bank of Australia, from which expected to increase the basic interest rate to 4%. In addition, the week will be published inflation data producers the EU and the UK.
also be of no small importance and news from China, which remains the main buyer of U.S. Treasuries.
Analytical review of the Forex market a week from 25 to 29 January
Previous week you can probably write to the credit of the U.S. dollar: the currency was achieved several months highs against not one of his competitor.
Beginning week was relatively calm, except for significant breaks on currency pairs with the Japanese yen on rumors of an impending pereutverzhdenii Benjamin Bernanke for a second term as Fed chairman, and attempts to become stronger competitors USD on expectations of favorable data on the GDP of Great Britain and good news from Greece, which tries to solve problems with their debts (Greece”s decision to go for syndicated loans has found the response from the major banks).
clearly strengthening the position of the dollar in the market started on Tuesday when it became known that the Central Bank of China has asked yet some banks to increase their foreign exchange reserves due to the large volume of lending, and others - to stop granting credits to the end of the month. This fundamental data from Europe did not manage to help European currencies. Although the indices of the German research institute Ifo, and were generally better than expected, release of GDP figures for the UK in the 4 th quarter, which was entrusted with so much hope before, definitely disappointed: 0.1 instead of 0.4%, which led to a sharp drop pounds almost 150 points.
At the same time on any news from the U.S. investors reacted to buy dollars: it appealed to him as a currency of refuge in bad data (which, of course, include the dynamics of sales of housing), then recalled the traditional correlation of “good data (eg, an indicator of consumer confidence) - to buy foreign currency.
The main event of the same week was the publication of the U.S. Federal Reserve decision on their interest rates. Interest rates, as predicted, were left unchanged, but the general tone of the Fed statement was positive for the USD, despite the recent release of disappointing economic data - the Fed expressed its intention to adopt a policy of low interest rates for “extended” period of time. Thus, the euro for the first time since July last year, went below 1.4000 and the dollar /franc rose to 1.0524. A pair USD /JPY, which began day above 89.50 and who tried for a while to fall even lower after the release went upstairs and had almost closed above the level of 90 yen per dollar.
If it were not for the handicap, received the British pound during the active trading in Europe, GBP has also completed a day lower, but the words of the representative of the Bank of England that “the economy of the country, perhaps, grew more than the estimates published in the week” led to otboyu pair GBP /USD from 1.6100, and attempt to rise up to 1.6250. However, these speculative British mantras was not destined to operate for a long time: the emergence of markets rational American members of a pound, as other currencies with relatively high base rate began a gradual downward movement and do not deviate from the path chosen before the closing day.
negative expectations for the debts of Greece and Portugal still continued a depressing impact on the traders on Thursday and Friday, keeping the situation tense in the euro area. Even during the Asian trading session Thursday, the euro had dropped to a mark 1.3936, while the Swiss franc noted at 5-month low 1.0554. An attempt to recover the euro led to a maximum of 1.4047, but unfulfilled forecast for German unemployment (8.2%) re-fixed the single currency to the south, and this downward movement continued on and after the release of news in the U.S., where the volume of orders for durable goods increased by only 0 , 3% (estimated 2%), and the number of initial applications for unemployment benefits totaled 470 thousand (estimated 450 thousand).
The FTSE opened up a significant gap in the continued rally in Asian stock markets, triggered by a reaction to Obama”s first ever annual appeal to the U.S. Congress. In the stock has positive things to grow the British currency, even during the European session, the pound reached a week maximum on a mark 1.6274. However, throughout the momentary coming to an end, and after the publication of the rating agency Standard Poor”s that the British banking system can no longer be considered the most stable in the world, the fate of a pound before the end of the week turned out to be foregone conclusion: mark on Thursday at 1.6111 on Friday formed a 3 pound -week low against the dollar at around 1.5982.
single currency on Friday could not even oppose reinforcing the U.S.: data on the change in GDP in the U.S. for the 4 th quarter reflected a growth of 5,7% (forecast 4.8%), which stimulated a new surge of interest in the U.S. currency and threw the euro to a new 6-month minimum of 1.3861.
Japanese yen had shown some capacity in the course of Thursday, it continued its movement and early Friday Asian trading, reaching 89.57 yen to the dollar, but after the statement by the President of the Bank of Japan Masaaki Shirakawa on “a willingness to act decisively in case of threats for financial stability, “the course of the Japanese currency was sharply weakened - traders interpreted this statement as a commitment to currency intervention. Formed a week for at least a mark of 90.90, the yen has completed a week at a compromise level of 90.24.
Swiss National Bank has never been famous rhetorical abilities, comparable to the samurai, the representatives of the bank simply refused to comment after apparent intervention by the French that occurred after 17:20 GMT on Friday, when the course of this irreplaceable currency suddenly found himself at the 4 — monthly minimum - 1.0641 francs per dollar. Complete the sales week for the franc at 1.0604.
forecast for the current week
The next week, most likely, will continue to maintain the attractiveness of U.S. currency, in the direction which traders are turning as if both positive and negative news, with caution.
Snatch up the dollar, which currency is made at the end of the week, quite possibly, be the beginning of the movement of U.S. currency to a more distant goals. Thus, from the level in the medium term will go to the level of 1.3500 euro /dollar (increase will be limited to 1.4000). Moving the pair dollar /franc to a higher trading range of 1.0500-1.1000 and closing at 1.0604 suggests the immediate objective of 1.0700 (as an upper boundary of the channel 1.0500-1.0700) in the way of a pair to 1.1000. The British pound, the whole week traded above 1.6100, but on Friday was able to drastically go down and close to minimume1.5982, thus demonstrating an attempt to escape from the range of 1.6000-1.6500. Pair may continue to fall, and the main resistance remains at 1.6200. Growth USD against the Japanese currency for the week was not so noticeable, but the pair USD /JPY still tried to get closer to the mark of 91.00 and completed the week higher. For this pair continued reduction may result in attempts at verbal intervention by the Treasury and the Bank of Japan, the target for the yen strengthens, we see the level of 88.50, while the upper limit for the pair - the level of 91.50.
However, it should bear in mind that closing the week at the extremes can be fraught with the opening of the market breaks after the weekend, especially given the possibility that members of the news taking place in Davos economic forum.
From the release of economic data scheduled for next week in the first place it should be noted for U.S. data, namely, the employment rate, which, according to preliminary estimates, to demonstrate the positive momentum. In addition, among American news is worth paying attention to the release of the production index of ISM, the data on the volume of outstanding transactions on the sale of housing in the United States, as well as data on changes in the volume of production orders. For Europe, the upcoming week should be a week of bidding, as well as the Bank of England and the ECB will take and publish the decision on the basic interest rates. The example of European central banks will follow and the Reserve Bank of Australia, from which expected to increase the basic interest rate to 4%. In addition, the week will be published inflation data producers the EU and the UK.
also be of no small importance and news from China, which remains the main buyer of U.S. Treasuries.
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