Euro is going up, but slowly

EUR/

Yesterday under conditions of low liquidity the single currency was thrown at the mercy of speculators. In the first part of the day it was growing on of favourable changes following the ECB's decision to issue 3yr direct loans to banks. Thus, by the time the results of the ECB's refinancing operation were published the pair had already jumped up to 1.3198. But hardly had the news come out, when there happened a reversal: heavy speculators considered such a great leap to be no good and began to vigorously sell the , having returned it into the slightly upward trend formed in recent days. Now the currency is trading around 1.3060. Nevertheless, we believe that the trend towards slight growth, which formed a week ago, has all chances to hold till the end of the year. There won't be any scheduled vital statistics from the region until the end of the week. As far as the effects produced by the ECB's loans are concerned, great demand really strikes the eye. Banks requested 489 billion – twice the sum analysts expected, but at the same time it can hardly surprise if we take into account the huge sums that require refinancing.

GBP/USD

The British is still in greater demand than the euro, which is clearly seen from the EUR / GBP dynamics. In a little more than 2 weeks the pair slipped by 3.5% to the 0.83 area, which is actually a great shift for this not very volatile pair. At the same time, one must be careful, because the pair may gain support in the 0,82-0,83 area as happened more than once in the last three years. Yesterday's statistics haven't sprung any surprises. The trend towards the deficit reduction by 3 billion to the last year's levels is holding. It may cheer the markets, but virtually it is nothing more than mere reflection of cuts in government spending. In the coming years Britain is going to significantly reduce the number of government jobs which threatens a more cautious consumer behaviour. In the past Britain was famous for its flourishing industrial and manufacturing development. Britons keep these memories in their minds and now it's the right time for them to take this path again. Be it good or bad, but in this case a weak exchange rate can be of great help – it will make labour power relatively cheaper.

USD/JPY

As expected, the yen strengthening on the overall growth of markets and the weakening of the hasn't held for long. The pair found its buyers below 77.60 and closed the day at 78.0, where it is trading now. The European debt crisis forced investors to pull their money back from Asia. This year Asian indices have suffered the biggest yearly loss since 2008. This happens because the global growth slowdown severely affects corporate earnings. As for Japan, the economic slowdown in the euro area (to the zero growth as some estimate) is likely to reduce the demand for the Japanese currency at the time of the capital repatriation in the first quarter of next year. In addition, after the earthquake companies will have to pay their debts and / or spend money on building factories in the country, which should also exert an upward pressure on the USD / JPY. Strategically 78 yens per dollar is too much, but locally it is still early to talk about a reversal until a confident break above 78 takes place.

AUD/USD

Despite sharp movements on Wednesday the has managed to remain above 1.01. This is a serious claim from bulls. It is a real surprise that having been so volatile in the past six months the pair has managed to return precisely to the levels of the beginning of the year (it was closed at 1.0230). Apparently, this very level will be fought for over the last days of the year. However, we anticipate the bullish scenario until the end of the year and its possible development in the first weeks of the year to come.

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