EUR/usd

On Monday evening markets started to recoup the losses suffered on poor employment data from the US. And since chances of the monetary policy toughening in the US diminished the dollar began to decline. The payrolls themselves were minutely described in our yesterday's review, so we are passing over to other news. This night in Atlanta Bernanke made a speech in which he mentioned about the necessity of bigger bank capital buffers. This statement was quite alarming for banks and has already led to heavy losses of their stocks. Yet, Bernanke was his usual self, i.e. quite gentle, as he made a reservation that it'll probably take much time to set these higher levels. Curiously enough, this very day the Institute of International Finance has lobbied for the break in the use of the Basel III bank rules. It's interesting that the idea to toughen the regulatory standards and to accumulate larger capital buffers should be extremely popular among the European regulators despite the fact that the regional banks are suffering most at the moment. The Fed was carrying out asset purchases for a longer time to save banks from toxic assets and was introducing lower interest rates to make the capital more available. As a result, now American companies (not only banks) are sitting on huge sacks with cash, but fear to use them, feeling uncertain about the future. It follows that despite all the efforts taken “Japanization” of the USA is running at full tilt. Since 90s this country has also been suffering chronic budget deficits and stumbling economic growth on the very slightest signs of toughening lending conditions.  But for all that corporations have a huge pool of idle liquidity, which goes preferably into production of the developing regions or of market outlets. Turning back to the euro/dollar, though the US news points at a slower pace of recovery in the country, the European debt markets feel none the better, again suffering the widening of spreads of the periphery bonds against their German counterparts. Apparently, today the euro will remain close to the current level of 1.31 or will tend to decline.

GBP/USD

The sterling has run out of steam. Though against the dollar it remained at the same level as at the opening (1.5890), it continued declining against the yen and set a reversal in the pair with the euro. The bulls picked up the pair around 0.8230 and are set to turn the situation in their favour. Let's see if they succeed, but at present we'd recommend cautious traders to watch the situation from the sidelines. Both the bulls and the bears don't want to give up the 200-day moving average level. Just like in case with the euro/dollar, the weakness of the markets due to slower than expected growth in the US and another worsening of the situation in Europe may put great pressure on the currency quotes. The nearest stop of the pair may occur at 1.5600/5650.

USD/JPY

The bank of japan kept the interest rate at 0,0%-0,1%. It cautiously makes its own forecasts of growth, hoping for the recovery of demand abroad. However, we now see that this very demand from abroad is not certain to appear at the moment. The bank has also confirmed that it'll keep combating deflation, but at the same time pointed out that the annual inflation rate will remain at 0% this year. Frankly speaking, it's not the most ambitious target. As a result, the yen received an impulse for growth and is now trading close to 81.30. Technically, the correction targets the level of 81.0, but it's quite possible that the pair will fall below this point.

gold

Gold has cheered up a bit lately. The slowdown of the global growth rates and growing fears for Europe have again revived interest in this precious metal. Though it's hardly possible that in the long term Gold will show a stunning performance after the 11-year rally, but on a short-term horizon the metal has chances to save its face, fighting for the 1.650 level after the inglorious fall from 1800 at the end of January.