EUR/USD
The euro had a hard time yesterday. For an hour it was attacked by a hailstorm of poor news from Europe. The German and Euro-Zone Manufacturing PMIs came out not only worse than expected, but even worse than the previously reported levels, thus reflecting a higher pace of business slowdown in comparison with the last month. So it's hard not to start selling the euro, especially taking into account that before that many expected a confident recovery. Moreover, one of the most respected business climate indicators by Ifo dropped down to the level of 100, which is the lowest mark since February 2010. The most disappointing thing was that even the IFO-expectations failed to demonstrate any improvement, remaining at the same level as a month ago. The market disappointment spilt over into selling of the euro down to 1.2920. However, afterwards the rates stabilized and the currency gradually started growing. The systematic purchases brought the euro back to the levels which were hit a day ago. As a result, eurusd is but a step to 1.30 again. The stock exchanges look quite reassuringly. They also recouped the losses of Wednesday morning. The Fed's statement boosted growth today and at the end of the US session. The regular meeting of the fomc, as expected, hasn't brought any unpleasant surprises – the policy has remained unchanged. The readiness of the Committee to keep stimulating the economy even if the latter improves is really encouraging. It looks as though Bernanke wanted to accelerate the economy to the beyond-the-trend pace and only then lift his foot off the gas pedal. Another reassuring line in the FOMC's commentary is that about “an uptick in household spending”. In the coming days we are likely to see stronger demand for risky assets, which will again entail testing of 1.31 and further of 1.3140.
GBP/USD
The British pound launched an attack against the single currency yesterday. The poor news from the eurozone didn't put out the pound-bulls. It was in demand all day long and the rise earlier this morning brought gbpusd up to 1.6070, i.e. to last week's levels. EURGBP lost 70 pips yesterday, over a few hours having nullified the growth of the previous six trading sessions. The pound got support from Mervyn King, who made it clear that extension of the current QE programme wouldn't be performed automatically. And we've hoped so much for it…
USD/JPY
The Japanese yen again played a trick on everyone. Having stabilized around 79.80, this morning usdjpy headed off to new highs. At present the pair is at 80.18. This is the highest level since the end of June. Then the pair was at such highs just for a couple of days. But the fact that the current wave of growth took place after some respite makes the possibility of further move upwards very high. It will be interesting to see how the pair will behave at 80.60, which is the high of June.
AUD/USD
Which festival of growth in Forex will do without the aussie? Yesterday's inflation data were in favour of the Australian dollar, showing higher consumer price growth than a quarter before (from 1.2% to 2.0%). Under such circumstances the RBA doesn't need to continue further easing of the policy in November. Today's increase in risk demand (especially due to yen funding) has driven audusd to 1.0380. On October 18 the insurmountable obstacle for the pair was 1.04. Let's see whether the Aussie will be stronger this time.
