EUR/usd

Those, who missed volatility and interesting trends in the second half of the previous year, now should be happy about the current state of things in Forex. The single currency rose by 2 figures up to the 15-month high last week and this week for less than 2 days again dipped below 1.34. In January the pair was consolidating below this level for about two weeks, while breaking through the level promised a powerful and continuous rally. The rally proved to be relatively powerful, but not continuous. Back then we already noted that the single currency was appreciating against the dollar only together with the stock exchanges and some commodities. And then we mentioned that the multidirectional movement of the kind couldn't last for long. At that time we bet on a correction or on the beginning of the downward move, since before that the markets went through a fairly impressive rally. The same with the single currency. At the beginning of January its growth was fed by the capital repatriation which became possible due to stabilization around the debt crisis issue. draghi's comments that the committee unanimously voted for pursuing the current monetary policy (i.e. refused to cut the rate) was also in the euro's favour. The positive statistical data – good reports on the German business sentiment and upward revision of PMIs – made its contribution as well. But still we believe that the single currency travelled a very long way up. Against the pound it grew by 13%, which is very impressive for such a non-volatile pair. Against the dollar it rose by 14% or 17 big figures for slightly more than half of the year. Against the yen it demonstrated an impressive growth of 35%. Probably, it's time the EU officials started advocating a lower exchange rate of their domestic currency? Maybe, all that we see now in the single currency is just the portfolio-reshuffling after the impressive upward move. So, the ECB's meeting scheduled for Thursday and the ability of eurusd to consolidate above 1.34 will be of great importance.

GBP/USD

The British pound felt a bit better yesterday. It was swimming against the stream for a while. But that was mainly connected with the fact that the currency was overbought in January. At present 1.57 seems to be a nice level of support, but its days may be numbered, since investors' cautiousness puts pressure on the risky assets, including the sterling. Now trading is held at 1.5730. The coming Services PMI release is of great importance here. The December data demonstrated a decline in activity for the first time in two years. So, it only remains to see if the slowdown will be confirmed in January as well or not.

USD/JPY

The short-term growth of usdjpy during the Asian session must have fooled many. The pair managed to grow to 93.15, but since then the pressure has been stronger. Just like most stock exchanges traders need to take their profits after the continuous rally. Thus, the Japanese Nikkei has rolled back to 1 ½ -year high today, spurring the demand for the yen. As a result, USDJPY is now a figure below yesterday's high, i.e. at 92.19.

AUD/USD

The RBA kept the rate unchanged at 3%. It caused a short-term upsurge to 1.0450 in the pair, but then the aussie was pushed below 1.04. The bears are strong and try to get hold of the general demand for the US dollars instead of the alternative currencies and also of the CB's phrase that there is some space for further rate cuts in case of need. We expected a different decision from the CB, not a different reaction from the markets.