The first trading day of the week can be ascribed to the outstanding ...

In spite of poorness of economic statistics and day-off in Japan, the last trading session was marked by series of interesting movements ? the dollar resumed strengthening against the pound and the yen, but it slightly decreased against the euro. By the way, the euro/dollar currency pair was the least volatile. A single currency fixed profit with the help of an announcement of the head of the Bundesbank, who told there is no signs of the euro overvalued. Concerning the falling of pound and yen, it is possible that there is apprehension connected with the fact that Great Britain can lost its rating AAA, and also investors night start preparing to the next meeting of the Bank of Japan on the further quantitative easing program, which will take place on Thursday. There were no US economic data yesterday. Today news package is also almost empty. Market attention might be drawn by the US NFIB Small Business Optimism Index for January, which is expected to improve to 89.5 from 88.0 in December, and also monthly report about budget execution for January, which might show increase in deficit to -4.6 milliard dollars after -0.3 milliards in December and deficit reduction according to annual statistics and the same period in 2012, when it fixed -27.4 milliard dollars. If talking about the factors of influence, in the next trading session the most important one might be the politics, as announcement about apprehension of approaching currency war is getting louder.

EUR

A single European currency increased in trading session yesterday. European currency grew in trading session yesterday and fixed profit against all opponents. The euro was supported by an announcement of the head of Bundesbankand a Weidmann, who said that the euro is not overvalued and its weakening might lead to higher inflation. This announcement gave rise to purchasing euro, but a single currency strengthened only against the pound and the yen, as these currencies has its own problems. But the dollar lost only some positions. It is possible that there is still disappointment in the euro, cause by announcement of Draghi, and attempts of European top management to correct the situation are unsuccessful, it is confirmed by increasing profit-making-capacity on the European debt market. There were a few economic statistics, which presented the report about industrial production in France. It announced that the output reduced by 0.1% in December after + 0.5% m/m in November, but it decreased by 1.8% q/q according to quarter statistics. It testifies to the possibility of appearance of weak results of the GDP in the 4^th quarter, which will be announced this week. Today there will be no important information about euro zone economy. Market attention will be paid to information concerning tendencies in currency policy. It is known that the countries of G7 are going to make an announcement which will prevent currency wars. And it is possible that the details of this perspective will be a factor of influence in the nearest trading session.

GBP

Apprehension concerning the fact that Great Britain might lose its rating AAA this year and also weak economy of Great Britain made British pound came under the pressure. The sterling selling was also caused by mass media information, which told that in the report about inflation the bank of England would note risks of high price pressure, which might grow, it would also note the possibility of further weakening of economy. There were no economic data yesterday. Today news package might give a lot of information about inflation which would give rise to reflection. Indexes of price dynamics for January will be released soon. According to the forecasts, the Consumer Price Index (CPI) is expected to fix -0.5% m/m, +2.7% y/y after +0.5% m/m, +2.7% y/y, the Retail Price Index (RPI) -0.6% m/m, +3.1% y/y, earlier it was +0.5%m/m, +3.1% y/y, and the producer price index (PPI) +0.8% m/m +0.9% y/y at entrance and +0.2% m/m, +2.1% y/y at exit. Such perspectives testify to apprehensions connected with expectations of further rising inflation to some extent, As the ??? can?t influence this process by toughening the policy, economy recovery is under the question. As a result the sterling might keep falling.

JPY

Japanese yen decreased against all majors and went down to new record low against the dollar in trading session yesterday. In spite of a lot of announcement about necessity to prevent potential debilitate, caused by currency devaluation, the market is sure that Japanese government would keep implementing its policy and weaken the yen in order to reach the target inflation rate. The situation is roused by expectations of the next meeting of the Bank of Japan on the perspectives of monetary policy, which will take place on Thursday, and also introduction of new head of the Central Bank of Japan, which would more likely implement mild monetary and credit policy. Market found confidence in the announcement of the Ministry of Finance of the USA, which told about quantitative easing well-founded actions of Japanese government concerning quantitative easing. Economic data of the Land of the Rising Sun, published today, showed improvements of the Consumer Confidence index in January. It rose to? 43.3 from 39.2, when 40.5 was expected. Money aggregate M2 increased to 2.7% y/y after 2.6% y/y, and ?3 ? to 2.3% after 2.2% y/y earlier. Concerning the perspectives, the yen could keel decreasing only for a short time. It is more likely that the market would get a break and wait for the results of BoJ.

Source: http://blog.forex4you.com/the-first-trading-day-of-the-week-can-be-ascribed-to-the-outstanding-mondays/

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