EUR/usd

Taking into consideration the fluctuations of the recent months , this week's movements look as fluctuations near the uptrend support. Breaking through this line (supposedly 1.3510 by the end of the week) will allow speaking about a serious bullish sentiment in regard to the dollar. Now bulls prefer attacking on the flanks, putting pressure on the currencies of the export-oriented economies like Australia, Canada, Russia. But, in our opinion, it is a temporary situation and soon the EU currencies will come under a stronger pressure. To be more exact, the dollar will commence growing. The risks concerning the euro lie with the increased interest rates in the interbank market. The rate cut in November didn't produce any due effect on the rates – they continued to rise. And now we hear more and more talks about the need in the rate decrease in February. The space for such decrease exists due to slack price movement. And if we look at the euro's rates in the previous months, we won't be worried about its sharp upsurge in the first quarter. Yet, there is a risk that the tight labour market of Germany will stimulate increase in earnings and with that stir up inflation sentiments. In this case Germany's representatives in the ECB will be even more opposed to the policy easing. Anyway, the impressive Prelim PMI for Germany and the whole eurozone has enabled the single currency to shoot up by a figure and reach 1.3640.  

GBP/USD

The British currency is growing in jerks and has already tasted the highs since 2011, breaking through 1.6600. It's been lucky getting positive macroeconomic statistics in the recent weeks. Friday's impressive retail sales stats were followed by perfect employment data yesterday. The unemployment rate fell from 7.3% to 7.1%. Thus, we are just a step to the threshold level, which the CB marked in July as a level to consider the rate increase. Then the level of 7% was expected closer to 2015. Now many believe that in February the BOE will lower this threshold. 

USD/JPY

The yen is dolefully trading sideways. The bulls are too weak to get to another level. It is quite understandable since many active speculators now show vivid interest in other pairs, so usdjpy keeps plying between 104 and 105. It is quite possible that it is gathering strength like it did last February when afterwards it soared up. We shouldn't forget that unlike the Fed the BOJ keeps filling the markets with liquidity and now even doesn't treat the question about the beginning of the stimulus rollback as acute.

USD/CAD

The Bank of Canada failed to support its domestic currency. Moreover, the CB's comments regarding the coming inflation slowdown weakened the Loonie even more. usdcad has rocketed to the highest levels for four years and a half. Today the pair keeps growing and at these levels it isn't easy to understand when a reversal will occur. For a start, we need some significant favourable news. Now we have none either on employment or on the trade balance. Probably, today's retail sales stats will somehow stir up the domestic demand.