EUR/usd
Since the beginning of May the US dollar has been on the rise. In the previous years it was accompanied by the turn of stock markets from growth to decline. However, this time the situation is a bit different. The single currency lost about 3.5% from May 1 till last Friday and trading is now held close to the lows of March. If the markets are not strong enough to break lower, the next support level will be seen at 1.2650, i.e. the lows of November. This would be a favourable outcome for the EU economy, which is striving to get out of the recession. It's quite possible that the US dollar will be growing in the near future as the US economy feels much better now. Talks about the near reduction of the Fed's current asset purchasing programme of $85bln per month are heard more and more often. Now these are only rumours, but many traders believe that they will get evidence from the Fed's meeting minutes , which are released on Wednesday. We doubt this and regard the possibility of the dollar's growth only due this fact with caution. In our opinion, the most advantageous thing here is the contrast between the EU and US economies, but nothing more. Despite quite positive growth indicators, at present the States doesn't face the risk of an inflation rise, which will let the Fed step on the gas further on. Moreover, the housing market hasn't been growing for three months, which also makes curtailment of the stimualtion in the near future hardly possible. Upon the whole, we believe in the gradual appreciation of the dollar, expecting that 1.2750 (the March low) may be broken this month and that in the summer months the further move to 1.2650 will take place. Now it is unlikely that the situation will change so much that the single currency will fall to 1.20 or even lower.
GBP/USD
The British pound again feels weak, like it felt at the beginning of the year. As a result, the move from 1.6330 to 1.4830 was followed by a 50% retracement (to 1.56), after which the sterling again became weak. Here we also can expect further decline. 1.50 may become the nearest target of the descending trend, while the further perspectives will depend much on the British stats.
USD/JPY
The yen is confidently consolidating above 100 in usdjpy, but yet doesn't rush to conquer new highs. Weakness of the yen is so strong in comparison with the previous year that it can arouse serious discontent among representatives of other countries. We expect that the Japanese officials and members of the CB make their rhetoric more moderate, though will not change parameters of the programme in the coming weeks and months.
AUD/USD
The Australian dollar, which has been mercilessly sold in the previous two weeks, seems to found the ground under the feet in the area of weekly closes of the previous year and the year before last. It's worth waiting for the RBA's meeting minutes, where the rate was cut, and consider purchasing of the currency.
