EUR/usd

Tuesday turned out to be a fairly quiet day for most of the markets. The American exchanges were generally dominated by the correction sentiment, but the scope of correction didn't give any particular cause for concern, as stocks recouped most of the losses to close out the day. It is noteworthy that the single currency managed to stay almost unaffected by the initial impetus for decline in the US. Regarding the results of the day, the EUR/USD rate remained almost unchanged, and now makes about 1.3260. Such dynamics supports our supposition that the euro has good chances to grow in the coming weeks. Formally, buying was triggered by the news that Greek legislators agreed on the acceptance of the troika's aid package with the significant majority voting in its favour.  Wednesday is unlikely to spring any unpleasant surprises either. Bernanke in his pre-published statement has pointed at conspicuous progress made by the European financial markets. However, he also mentioned that it is too early for the European policymakers to get relaxed on the path of reforms. Improvements in the US construction industry are also worth mentioning. We are no longer that ironic about the possible recovery in this sector, although with reservation that it's highly probable that the figures similar to those of 2006 (over 2 million new homes yearly) won't be recorded for another decade. Nevertheless, from the bottom of recession (about 500K) the volume of monthly building permits increased by 40%, having reached the annual growth rate of 698K (in February). As seen in other reports the Americans tend to buy cheaper and plainer homes now.

GBP/USD

The inflation rate in Britain formally proved higher than expected, but the gap between the factual and expected figures can hardly be called significant. Monthly consumer prices added 0.6% against the predicted 0.4%, while the annual growth rate coincided with the expected slowdown to 3.4% in February against 3.6% a month earlier. The core price index didn't come in as a surprise either, having made 2.4% compared to 2.6% in January. What will happen next, we wonder? We expected that despite the high base effect consumer-price inflation wouldn't be slowing down in the coming months as speedily as it was forecasted by the Bank of England. However, this is not likely to change anything about the policy. The Bank's trump card is in its allusions to the high possibility of inflation going below the targeted level rather than above it, as it's been over the last three years. And in the near future it would be really helpful for the Bank if energy and food prices decreased. Today is an important day for the pound, as later in the day markets will see the country's annual budget statement. We believe that there won't be any great fluctuations at the time of publication. Generally, such news is gradually recouped over a few days or weeks, after being careful studied by analysts. Just published Minutes of the MPC's meeting in March turned out to be quite surprising. It became known that in early March two members of the Committee (David Miles and Adam Posen) voted for expanding of the bond-purchase programme by 25 billion pounds up to 350 billion. This news has triggered heavy sales of the cable.

USD/JPY

The Japanese yen is again slowly losing its positions. For a couple of days it's been feared that the pair will face a dramatic correction as a result of the year-end profit repatriation held by large corporations. Such flows, even if they do exist, are now much weaker than before. And it's not without reason. First, the low foreign demand and growing volume of the corporate production outside of Japan require a smaller scale of repatriation. Secondly, it is connected with high prices of energy and metals, which threat the fifth month of trade deficit in a row. Tragedy at Fukushima a year ago has seriously damaged the country's energy balance. Now the Japanese are forced to buy more oil and coal, and the latter are very costly and almost similar to the prices in the first half of 2008 now.

AUD/USD

Yesterday traders demonstrated quite a good activity in the Australian dollar. Unfortunately, most of this activity was directed against the aussie. AUD/USD was falling for the most part of the day and at some point reached the level of 1.0460. It's close to the levels at which the pair found buying interest in the middle of the last week (1.0420). So, the «buy on dips» formula is still true for the Australian dollar. However, judging by the news feeds, China's slowdown is getting more and more dramatic. Since the beginning of March the Australian dollar has been mainly declining, so it is entirely possible that it will fall down to 1.04 in the coming days.