Statements about the expectations of the ECB falling below target levels in the first quarter, seem to have prompted the market to believe that this could be a hint for an early monetary policy easing in the European regulator. Against this background, as well as other words of Draghi, which also could be interpreted as signs of the intentions of the Central Bank to mitigate the position in the short term, the dollar has appreciated sharply against the euro and finished the day with a solid “profit.” In a dispute as to other major opponents the dollar looked much less popular – fell against the pound and the second day fixed neutral result against the yen. Support of the pound came from the statements of future chief of the Bank of England, who in a speech to parliament in Britain proved to be a diplomat and has spoken more carefully about their positions on the mitigation measures in the monetary policy. As for the yen, after large-scale sales of the Japanese currency market has decided to make a break and wait for new guidelines that are sure to appear with the new head of the Japanese central bank. Data on the U.S. economy was not enough – about U.S. productivity in the 4th quarter showed a decline of 2.0%, and the report on the number of initial claims for unemployment benefits last week reduction requirements, but worse than forecast, to 366 thousand, when expected 360 thousand, while the figure for the previous period have revised upwards to 371 thousand from 368 thousand of the original package of news today is also not particularly big, publish trade surplus in December is likely to reduced the deficit to 45.5 billion after -48.7 billion earlier, and report on inventories of wholesale trade in the same month, which may show continued growth, +0.5% m / m, after +0.6% m / m previously.
The results of the main even of yesterday were within forecasts – the ECB left interest rates unchanged seventh consecutive month. However, the single currency came under pressure and ended the Thursday session with respectable losses against all majors. Sales of the single currency began during the press conference, the president of the European Central Bank chief M. Draghi, who expressed hopes of lower inflation in 2013 below 2% by the end of the 1st quarter, it was noted that the euro zone is still in sluggish economic activity. Obviously, this rhetoric could be a hint that the European regulator intends to lower interest rates within the first quarter of the year, until the end of which just over a month and a half. As a complement to this kind of assumption the words that “the exchange rate should reflect the fundamentals,” were sufficient and we all know that the Euro zone economic data continues to give results which indicate the continuing threat of recession. Published news on the economy is small and they had no effecton the mood of the market. As presented statistics – German industrial production in December grew up, 0.3% m / m, -1.1% y / y, after -0.2% m / m, -3.1% y / y to see forecasts 0.2% m / m, -0.5% y / y Today’s news set Eurozone also did not differ wealth of publications, the focus can be on the results of December’s external relations of Germany – Foreign trade surplus is expected to decrease to 13.7 billion euros against 14.6 billion in November, and the surplus of current account balance to increase to 18.0 billion euros from 15.3 billion previously. Looking forward, it probably makes sense to fall further weakening of the euro as appeared yesterday sentiment, coupled with the political problems in Spain and Italy, can arrange a larger market to lock in profits on previously open long positions in the euro to clarify the situation.
The meeting of Bank of England about the rate expected with less excitement that generally justified by the results – the basic discount rate remained unchanged at 0.5%, as the volume of incentive funds. Comments on its decisions, as usual with no adjustments, the BoE has not presented. However, the British pound was the leader in yesterday’s session, and strengthened over the “front.” Confidence to the sterling rose against the future performance of the Bank of England M. Carney to a committee of the British Parliament. His statements contained less aggressive disposition to continue easing and were regarded as indicative of the propensity to tight monetary policy. Positive results could help sterling to retain its positions, presented by statistics – industrial production in December rose by 1.1% m / m, -1.7% y / y 0.2% m / m, -2.4% y / y, when waited less impressive total, only + 0.7% m / m, -2.0% y / y, with the production of the manufacturing sector recorded a 1.6% m / m, -1.5% y / y vs. -0.3% m / m, -2.0% y / y. d The results of foreign trade were better than expected,deficit in December fell to -8.89 billion from -9.3 billion pounds in the previous month. Today, news on the economy of the “islands” have no plans to publish, the sterling will remain under influence of the information which in other regions is no different amounts as well. Obviously, under these conditions a positive mood for the pound can survive and grow some more sterling. However, in the medium-level attitude towards the British currency is not likely to change because political perspectives regarding the occupation of Britain in the EU is becoming more uncertain, and the economy does not produce a stable signal regeneration, which, by the way, yesterday, noted by the report of the National Institute of Economic and Social Research (NIESR), that declared that there is no economic growth in January.
All the troubles of yesterday seem to have passed by the Dollar / Yen. The Japanese currency has remained in a narrow range and closed the trading at the opening price. However, in a dispute with euro interest to the yen rose against the background of general concerns over the likely easing of the monetary policy in the euro area, due to comments of Draghi. The ongoing rhetoric of the authorities’ Land of the Rising Sun “that the main goal is to bring the country’s economy from a state of deflation, no longer has such influence as before, which can be regarded as the intention of the market to take a breather and wait already support these forward-looking statements. Data published today pointed to the continuing weakness of the economy and lack of sufficient improvement in the external relations of the country – the current account balance of payments recorded a deficit in December, 264.1 billion yen, and the trade balance maintained negative than the forecast – 567.7 billion yen. But that the Japanese do not lose heart – the economic outlook index for January, indicating the level of confidence in the future, was 56.5 compared with 51.0 in December. But near-term outlook, seems to be on the side of expected profit from trades open against the yen, which, in general, supported by the strengthening of the Japanese yen in the current session.
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