EUR/usd
The winner is Obama. It's interesting to see in what succession the markets reacted to the news. oil shot up higher than other markets yesterday. American WTI flew up to $3.8. The US stock exchanges returned to the area of local highs. And Forex patiently waited for the final election results. In EURUSD the reaction to Obama's victory was seen only at night. The pair rose from 1.2780 by approximately a big figure. The market reaction comes up to our expectations. Obama's reelection is good news for risky assets and commodities and bad news for the dollar. Unfortunately, it's too early to speak about a new trend of growth now. The democrats have won control of the Senate, however in Congress the republicans are in the majority. And this promises very tense and continuous debates over the fiscal cliff later this year and at the beginning of the new one. The only reassuring fact is that the Fed's members currently find it necessary to continue bond purchases and want to spend at least 600bln on it. You won't believe but this is exactly the depth of the fiscal cliff expected in the coming year. Ben struggles to keep the situation under control. Anyway, there are lots of risky events ahead. Today the Greek Parliament is to adopt the package of austerity measures. The rumours that the coalition may lose some important members makes the situation even tenser. As a result, the markets feel nervous. Then a bit more than in a day the ECB holds its regular meeting on the interest rate. Of course, the chance that draghi will change something in the policy is very slim, so all attention will be paid to his commentary or to be more exact to how he will put pressure on Spain so that the latter ask for a bailout (or to actually if he puts this pressure at all). Besides, we will learn what policy the new leaders of China will stick to. Only after the break through 1.32 we will be able to speak about the confident upward trend.
EUR/GBP
Following the euro, the sterling is also trying to grow, however fails to keep up with its continental vis-à-vis. gbpusd has grown to 1.6035 and thus has recouped Monday's losses. Still the pound lags much behind the single currency. EURGBP, which already yesterday threatened to sink below 0.80, now is trading at 0.8030, which is a five-day high. Such a poor performance is largely a result of the September slowdown in the industrial production by 1.7% against the expected 0.6%. NIESR's report about the sharp decline of the GDP growth aggravated the situation even more. The national institute calculated that over three months ending in October the economy grew just by 0.5% against 1.0% a month ago. So, it looks like the upsurge was temporary.
USD/JPY
The aversion to the dollar in the morning was clearly seen not only in the pair with the euro, but also with the yen. The pair slipped down to 79.80, but failed to consolidate at these levels. The pair again strongly correlates with the performance of the stock markets. The latter being on the rise, the yen is depreciating across the board, even against USD.
AUD/USD
The aussie-bulls cheered up on the announcement of the election results. The rally is going on. Yesterday the daily low of the Aussie made 1.0365. The highest rate by the end of the day was already 1.0474. It's largely caused by the renewed demand for gold, which not only has got back above 1700, but even managed to reach 1728, thus having appreciated by $56 (3.3%) over less than three days.
