G20 didn’t dare to name the shame


is a dog that barks and doesn’t bite. The joint statement pointed out that the countries would abstain from competitive devaluation of their domestic currencies. Anyway, the states do have some space for maneuver since they are not forbidden to carry out quantitative easing and increase expenditures to support growth of their domestic economies. Actually, that is what all were after when expanding their currency reserves. Thus, the fears that Japan’s politicians would be shaken a finger at and that the Fed would be more cautious proved to be groundless. All this is a good stimulus to ease tension in the markets and continue the trends which have been in place since the end of the previous year. To be more precise, it is further growth of stock markets and appreciation of the single currency. The latter was not in the form of a rally, but is still clearly seen in crosses.  Looking at this trend (since mid November), we see at the support level now. At present this support is at 1.3320 and trading is held at 1.3340. It’ll be interesting to watch the fight between and bulls at these levels. Actually we still stick to the opinion that the EU economy is rather weak, especially when compared with the US one, which is sure to tell badly on the pair’s rates. Anyway, active QE by the Fed on the one hand and reduction of the ECB’s balance on the other hand may support growth of the pair in the absence of big news.


When speaking about preservation of the recent trends, for the British we mean depreciation. From September to January it was trading in a wide flat range, which then developed into heavy selling. Now trading is held a bit below 1.55 which is close to the last summer lows. Much lower levels were reported at the end of last May. Then the rate was as low as 1.5260. However, with low demand for safe havens , i.e. for selling in stock markets, we can hardly expect such low levels. It’s quite possible that the pair at present will again go flat and trade in a wide range of 1.54-1.57.


Inspired by absence of censure from G20, traders went about selling the yen. again went back to 94 at the beginning of the Asian session. The Asian stock markets went further and hit the 33-month high. Anyway, there is a feeling that the yen sellers will stop somewhere at these levels. Before continues  appreciating (which we do not doubt) there should be a serious portfolio reshuffling and inflow of fresh funds into trade against the yen.


The ’s fate is not very enviable now. The currency served as a refuge for capital last year due to the uncertainty about the ’s fate and effective printing of money by the US Fed. The RBA still has a chance to pursue the traditional monetary policy (i.e. to cut the rate at the time of economic recession). This is why traders speculate actively on changes in . The Aussie is one of the few currencies, which still keeps following the classic laws of Forex. 

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