EUR/usd
Details of the agreement on Greece's debt, released yesterday, had a positive impact on the single currency. According to Bloomberg, the lenders agreed to the coupon payment of 3.6% for the 30-year bonds, which is a 70% reduction of face value. There was also one more rule adopted – the warrant, which will be triggered depending on the GDP dynamics: in case of fairly good growth, debt holders will get more. Let's face it – there is a real threat of new debt write-offs. After the unpromising start of the day with a drop to 1.3025, the euro tested the 1.32 level for the third time in three days. The attempt can hardly be called successful. The single currency virtually doesn't have any other driving forces except for triggering short stop-orders. The impulsive leaps up are followed by no further development. The ECB on its part rejects any obligations to participate in Greek bond haircuts. Probably, first we will see concrete official swap arrangements with private creditors. At present all central bankers dodge the question of how they can actually help poor Greece. The news on U.S. wasn't very reassuring. The data on private sector employment from ADP proved worse than expected: 170K jobs in January against the expected 190K and 292K in December. However, this did not impede another rally in the markets, having sent the S&P to the January highs, and also allowed for closing at the highest level since last year's July.
GBP/USD
The pound clings to positive news quite successfully, growing along the broad market range. Yesterday the sterling broke above 1.58 on the stock market growth, reaching the level of 1.5880 at some point. Now the pair has slightly rolled back to the 1.5840 area, but is still keeping quite a steep angle of the uptrend. So already now we may say that sterling bulls are about to test the 200-day moving average. This level is now at 1.5950. But the sterling growth was mainly caused by strong data on manufacturing activity, published yesterday. January PMI rose to 52.1. This return to the territory above 50 is the first one since September and the highest level since April last year. It's a very surprising result for those who expected a serious decline in the first quarter. We also belong to pessimists' camp, claiming that the Bank of England will have to resort to further QE sooner or later. The only question that remains open is whether it will happen in February or in March.
USD/JPY
Japanese officials are greatly concerned about the strength of their currency. Japanese Finance Minister Jun Azumi has stated that he “can't overlook” the speculative movements in the markets, which increase the yen value. All this tells badly on the country's trade balance and suffocates the activity of Japanese manufacturers, who for several years in a row have reported losses and lowered the sales forecasts for their companies. Nevertheless, the fact that such rhetoric has appeared only now suggests that the authorities may let the yen grow a bit more before starting to actively sell it. Besides, judging by the mood of the MoF, they are more oriented to prevent sharp fluctuations in the currency rather than to stick to any certain course.
AUD/USD
AUD and NZD are in high demand on the continuing purchases of risky assets. The aussie rose to 1.0760 today. On September 1 and October 27 the pair was pushed down from these levels, first to 0.9380 and then to 0.9660. Both times the sale lasted for almost a month, but on a lower scale. It is possible that this time bulls will stop fighting near the parity, if they allow approaching this level at all. The main battle is expected next week.
