EUR/usd

It is not the first time when at the beginning of draghi's conference the markets mainly sell the euro, but eventually switch over to buying of the currency. First Draghi pointed to the fact that the forecasts for the second quarter had changed for the worse. Yet he didn't suggest anything new to maintain confidence in the suffering banking system. It surely disappointed the markets, though later they tempered justice with mercy on the news that the Bank would continue to hold 3-month auctions to supply unlimited liquidity. Besides, it is prepared to do that as long as needed, another year of auctions is guaranteed. As has become known, some chief members of the bank voted for the rate cut. So the further questions to Draghi were imbued with the anticipation of a rate cut in no longer than a month. However, Draghi's comments don't make it sure. He generally prefers to ‘buy the time' while EU politicians follow the path of deeper integration within the euro bloc. In the meantime the Fed has changed its tone into more dovish. Fed's Vice President Janet yellen, referring to the ongoing troubles in the housing market and worse financial conditions, announced probable extension of Operation Twist.  Remember that the first round comes to its end this month. Within it the Fed has been exchanging 400bln of 3yr bonds for 6-10yr bonds since the end of the last year. It's very likely that this operation has contributed to the decrease in the yield of American 10yr bonds from 3.0% to 1.6%. It's also possible that further decline in the yield of 10yr bonds will be undesirable for the Fed, for this reason the Bank will focus on longer-term bonds. It will make the yield curve even flatter. Anyway, the news that the Fed is considering to support the markets further helps the stock exchanges, keeping up demand for risky assets. The single currency managed to consolidate above 1.25 yesterday and earlier today was trading close to 1.2560. Probably, today's speech of Ben Bernanke will strengthen the positive market sentiment even more.

GBP/USD

Today is a very important day for the sterling. And though analysts don't expect any changes in the monetary policy and don't think that the QE programme will be extended, traders still have built such probability into the rates. The sterling is appreciating against the dollar on the across-the-board buying of the greenback, but looks a bit weaker against the rest of the currencies. This is clearly seen in the dynamics of EUR/GBP, which since the beginning of the month has gone up from below 0.8 to above 0.8120. The Construction PMI data released yesterday showed the growth slowdown in the sector, reporting a decrease from 55.8 to 54.4. Remember, over the first months of the year this index pointed at a serious growth of activity in the sector. Usually PMI copies the GDP dynamics. Will the observed divergence spill over into faster growth in the second quarter or into revision of the PMI figures, we wonder?

AUD/USD

Yesterday's GDP was not the last good news from Australia. The employment statistics published this morning showed a 38.9K employment growth. Moreover, over 46K have been hired as full-time employees and the number of part-time employees has decreased by 7.2K. However, unemployment has grown from 5.0% to 5.1%, but it has happened because of the increase in the participation rate (from 65.2% to 65.5%). Save Australia the trouble of worrying about Europe and for another year it will be the best country to live in.

USD/CHF

Switzerland also published employment statistics today. In May the number of the unemployed fell by 4.3K. This index has been declining for 4 consecutive months and the level of unemployment without seasonal adjustment has again fallen down to 3.0% (the lowest figure since last October). However, this event hasn't found any reflection in the dollar/franc rate because of its strict peg. This peg will hardly be broken in the near term, as the euro is still an exile and Switzerland itself is in deflation. The recent data show that this May CPI came in by 1% lower than in May 2011. However, in the meantime USD/CHF is resting in the area of February highs.