EUR/usd

Already at the beginning of the week it was pretty clear that to Obama's regret no agreement would be reached till Christmas. Frankly speaking, there's little chance that it will happen in these few days until the New Year. However, the markets don't seem to be worried about that. In fact, due to the continuous work of the Fed's printing press and growing optimism regarding Europe's fiscal crisis, Forex and other markets gladly react to positive news releases and unwillingly go down on negative ones. Against our expectations, the uncertainty around the fiscal cliff issue didn't push the euro down on opening of trades today. The single currency is again close to Monday's daily close, i.e. 1.3175. Earlier on Monday speculators tried to warm up the pair and consolidate above 1.32. However, by the end of the trading day they took it back to the starting level of their speculations. Today we expect to see similar speculative moves to and fro. Yet, most likely, it will be another attempt to get higher.

Today's agenda is made up only by the US housing stats for October and probably some news regarding the fiscal cliff negotiations. We shouldn't think that if no agreement is reached till January 1, it will automatically “kill” the American growth. Quite likely, it will weigh on it month after month, so politicians will have an opportunity to continue their negotiations further in 2013.

usdjpy

USDJPY is the only rallying currency now. The trades opened with an upward gap, from 84.75 to 85.30. Shinzo Abe is increasing his pressure on the BOJ, threatening to reconsider its powers and deprive it of independence in case of disagreement with the policy. Hard times call for hard measures.