EUR/usd
USD's reaction to the domestic news is now somewhat nervous. And yesterday it could be observed with pretty clearness. Due to low activity during the EU session, all attention of traders was focused on the US inflation and also on weekly unemployment claims. The key inflation indexes met the expectations, having grown by 0.2% monthly and by 2.0% yearly. Such inflation rates are very neutral, which frees the Fed's hands and allows to concentrate on other indicators. The latter includes employment. Yesterday this indicator demonstrated decline of unemployment claims down to 320K, which is the lowest level for the last 6 years. Besides, the number of continuing claims is again below 3 millions. These are very favourable rates and they strengthened demand for the US currency for a couple of hours. EUR/USD sank to 1.32, but soon without any particular reason reversed up and went faster at 1.3250 and closed the day at 1.3350. Now the markets are focused on one single subject: whether the Fed will launch the stimulus rollback in September or not. The consensus forecast of analysts promises that it will happen just this way. However, we doubt this outcome. First of all, the monthly payrolls are still below the growth rates, which can be treated as normal and this is 200K of new jobs per month. If we consider the conditions in which the Fed started policy toughening earlier, we'll see that it last happened in June 2006, when the number of people on the dole had been less than 3 mln for half a year and the average monthly growth of jobs was close to 200K. If the latter index is okay, the former one is not at the proper level yet. Also be aware that the beginning of toughening tells badly on the economic performance. In the mid 2000s the beginning of the rate increase caused reduction in new jobs down to two-digit numbers, though that effect was not long-lasting. We still doubt that Bernanke will venture to take this risky step in September, but don't exclude that the Fed's rhetoric will become tougher.
GBP/USD
The British pound had an amazing roller-coaster ride yesterday. During the day it fell from 1.56 right to 1.55, but then, by the end of active trading in the USA, surged up to 1.5650, from where it went into a downward correction, lasting up to now. Britain impressed yesterday by favourable retail sales statistics. The major index grew by 1.1% in July, which is by 3% above the level reported in the same month a year ago. More so, the retail sales index has finally broken through the sideways range, which accompanied the economic stagnation. From the technical viewpoint, the pound has managed to prove that it is able to remain above the 200-day MA, breaking through this level, in fact, promises further purchases. Anyway, if the history won't play a trick on us.
USD/JPY
The yen kept out of yesterday's fuss. During the day it lost a figure, falling from 98.0 down to 97.20. Today we can observe purchases in the pair, which have pushed it up to 97.60.
NZD/USD
New Zealand again suffers from an earthquake. It has stopped growth of the Kiwi against the greenback. From the technical viewpoint, the resistance at 0.81 once again – for the third time – has repulsed the bulls' attack. In the previous two times the pair tumbled to 0.7750.
