EUR/usd
Thursday proved to be quite a favourable day for the markets. Tuesday's losses in the stock markets were recouped, and the single currency climbed pretty much higher. EUR/USD is trading near 1.3250 now. Most likely, it will stick to this level until the release of data on the US employment. The results of the private investor participation in the debt swap were postponed to Friday morning. The good news is that the 66% threshold has been crossed, which, actually, was already evident from the leaks yesterday. With the collective action clauses applied, the level of participation in the swap amounted to 95.7%. Such relatively good news allows us to speak about the successful closing of the hardest and most nerve-racking deal, which took six months to be clinched. However, the market reaction to this long-awaited news was not very strong, having come just with a few sales of the single currency. The analogy with what we saw after the summits inevitably comes to mind. The euro is supported on expectations, and invariably depreciated on facts. Something of the kind may happen this time as well. Yet the main motion will most probably fall on the US publication of non-farm payrolls. Remember that the markets are expecting the employment growth of 209,000. After ADP's data release (the 216K growth in the private sector) we assumed that the official figures would indicate the 235K increase or so. However, yesterday's data on unemployment claims force to be more cautious. Let's see. We're not going to change our expectations, suggesting strong data, growth in the stock markets and also higher demand for risk. But in the coming months the statistics may prove much weaker.
GBP/USD
As expected by most market participants, the Bank of England did not change anything in its policy, keeping the rate at 0.5% and the size of the QE programme at 325bln. However, that did not prevent the sterling bulls from taking GBP/USD above 1.58. Today markets will see a pretty good batch of important news from Britain, including data on industrial production (sluggish growth and preservation of a dramatic drop against the previous year are expected) and on producer prices (a significant upswing and keeping of input prices inflation above 7% are forecasted). In addition, the Bank of England will publish the data on Consumer Inflation Expectations. The previous quarterly surveys have shown the expected inflation figures above 4% since the end of 2010. Surprisingly, the data received from these surveys have been more accurate than the predictions of the Bank's own experts.
AUD/USD
It's been quite a bad week for the aussie. The data on trade balance were published this morning. Australia recorded the trade deficit at $ 673 million in January. However, it had been preceded by a series of rather high surpluses. Last year only February was a month of deficit. Apparently, this is somehow connected with business activities in China. Last year the celebration of Chinese New Year was mostly held in February. This year's celebration was in January. If so, the decline is sure to be offset over the next few months.
USD/CAD
Yesterday Bank of Canada was the fourth major central bank to publish its rate decision. As with all the other banks, the policy remained unchanged, but the upbeat tone of the accompanying commentary provided and additional boost to the Loonie purchases. The Bank noted the decrease of uncertainty in the global forecasts around Greece. After a month of stabilization around the parity the Canadian dollar is again more expensive than the U.S. dollar. With the ongoing rise in oil prices and business activity growth in the U.S., the Loonie has good potential for further growth. In fact, it is currently rumoured that Iceland wants to join the currency area of Canada, which means that they are going to have the Canadian currency in the country. Hasn't the European experience taught them anything?
