Main currency was trading in narrow corridors

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The market saw nothing interesting in today’s news again, and main currency was trading in narrow corridors during most part of trading session. Nevertheless, in the end of last trading session there was typical situation when investors do not want to take risk – the dollar strengthened against European currencies and decreased against the yen. But, achievements of “the backs’ were not impressive, maybe because of remained uncertainty caused by fear concerning the US budget problems. That is participants of the market do not want to take much risk. There were a lot of the US economic statistics, but it only slightly supported “the backs”, though results were positive. Consumer prices remained unchanged in December, the index remained at the same level according to monthly statistics and slightly decreased per annum, to 1.7% y/y from 1.8% y/y, Core inflation rate – Core CPI, without food and energy prices, rose by 0.1% m/m and remained unchanged per annum, 1.9% y/y. Industrial production increased by 0.3% m/m in December, at the same time workload output increased to 78.8% from 78.7% in November. Foreign investors started to buy the US long-term bonds, in November buying of the bonds amounted 52.3 milliard dollars after -1 milliard dollars a month earlier. Report of the US National Association of Home Builders (NAHB) showed that home builders mood didn’t change in January, the index remained at the same level 47. The FRS report “Beige book” was mostly positive. According to it the US economy is continuing to grow, the property industry is improving, but labour market has almost no changes. Today traditional unemployment insurance claims statistics for the last week will be published, it is expected to decrease slightly -  by 1 thousands, to 370 thousands, information about construction sector, where a number of new buildings is expected to increase by 3.4% m/m in December after -3.0% m/m in November, and a number of construction permissions is expected to increase by 0.6%  after +3.7% earlier. Talking about perspectives, it is most likely that nothing will change -  the market will demonstrate weak activity in narrow ranges till appearance of new reference points, which may appear as a result of dispute about the US debt-ceiling and information from Japan, where the Central bank will solve the matters connected with the perspectives of monetary policy.


A single currency was trading in side s and decreased slightly against the dollar. There werwe a few news about the EU yesterday, and it is most likely that the market was influenced by technical factors, which were determined by support levels accumulation and support in price area, where euro/dollar currency pair is located now. Euro zone economic statistics included only inflation rates data, which turned out to be as forecasted and didn’t rise any reactions in the market, though the level of price pressure remained higher than the ECB’s target. The Consumer price index (CPI) rose by 0.4% m/m and 2.2% y/y in December, it is even higher than European regulator target, which is determined lower than 2.0%. Today there will be a few news about euro zone again,  market’s attention may be drawn by construction data for November and monthly report of the ECB for January. It is unlikely that this information support a single currency – euro zone construction sector showed negative dynamics lately, and crediting in euro zone is not notable for activity. It is more likely that trading in narrow range and risk-aversion will be remained.


British pound turned out to be the most vulnerable currency in trading session yesterday. It is obvious that lacks of news from “the islands” deprived the pound of any support, and the sterling was left under the influence of outward mood, which is inclined to risk-aversion now. Today there will be no UK economic data, the pound continues to be under the influence of outward mood and technical factors, which made inclined to expectations of further decrease of the pound/dollar currency pair, and pound consolidation in side trend.


Japanese yen was continuing to rise against other main currencies. It is obvious that profits from short positions in the Yen is remained. What is more, the levels achieved by Japanese currency against the dollar and other majors might be interesting to Japanese exporters for conversion of currency earnings. Moreover, the announcement of the representative of government about danger of sharp weakening of national currency might also support the yen buying. News published today showed that economy of the Land of the Rising Sun is in hard times – Service sector activity index fell to -0.3% m/m, 1.1% y/y after  0.1% m/m,  1.3% y/y earlier, and sales in universal stores fell in December, in the whole country and in Tokyo – it fixed -1.3% y/y after 2.2% y/y and -1.1% after 3.1% y/y correspondingly. Concerning the perspectives of the currency pairs which include the yen, it is more likely that Japanese currency will be not supported in the nearest future, as the market will be careful on the threshold of the BoJ meeting, which might be very influential event.

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