EUR/usd
The single currency is sinking deeper and deeper in the bog. It is remarkable how systematically and gradually the pair is being pushed down. Apparently, capital movement is going on at the level of structural changes in the plans of investors. It means that inside the market behind such little movement of rates stands really big money. And this money wants to sell the euro rather than affect the currency rate. The single currency still has to deal with one important level, that is 200-day MA, which is now at 1.3140. The market touched this level, but quickly bounced off it. The major activity is expected in the second half of the week. In the news background Final Services PMI for the biggest countries of the euro zone is worth noting, it will also be supplemented by the estimate of economic affairs in Italy, Spain and other countries in August. The suffering periphery is expected to demonstrate some improvement. The main question is if this improvement will really take place. More details on the EU economy will be received from the retail sales release and the revised GDP stats for 2Q. Turning to the US statistics, Trade Balance is noteworthy. In June there was a sharp decrease in the deficit, July data are expected to indicate some extension, but still less than $40bln. It is a serious bid for rebalancing, but at such a rate the merchandise deficit will be levelled only in a few years, which is hardly the ultimate dream of US politicians.
GBP/USD
Another upsurge in the sterling. Yet, as is often the case in the recent days, this upsurge is especially conspicuous against weakness of the euro and yen. GBP-bulls were inspired by strong Construction PMI, published yesterday. The index rose to 59.1, which is the highest rate for the last six years. Today we'll see Services PMI for Britain, which should correct after the rise to the impressive 60.2 in July. Strength of the pound in the coming days will depend much on how deep this correction will be.
USD/JPY
The yen keeps getting weaker, though at a slower pace. At present trading is held at 99.77, which is closer to the five-week highs. Messages about the earthquake, which shook a couple of buildings in Tokyo, strengthened the Japanese currency for a while, however the effect didn't last for long.
AUD/USD
The aussie is getting stronger as forecasts on fundamental indicators are changing. Despite yesterday's change in the RBA's commentary, the impressive rates of economic growth in 2Q have come into play. As reported by Australian Bureau of Statistics, the economic growth made 0.6% against the first quarter and 2.6% against the second quarter of 2012. The latter rate somewhat surpassed the expectations. Traders must have thought that the situation in Australia was worse, doubting the forecasts of analysts, as right after the release of the GDP stats they rushed to buy the Aussie. Now audusd is trying to break above 0.9100. Technically, we see that at 0.8890 “the double bottom” is forming – a good reversal signal.
