EUR/usd
The data on the ECB's direct loans proved adverse for the common currency and eventually generated demand for the dollar. It is quite an interesting result as the figures turned out to be close to the middle of the predicted values. Three-year loans totaled 530 billion euro. However, the euro failed to make any gains on the news. On the other hand, the peripheral bond yields began to decline straight away, thus indicating that the fears for the fate of these countries subsided. Judging by the influence such loans produce on the currency, they can be definitely attributed to quantitative easing, which makes borrowings in the currency cheaper. In the end, it should trigger off demand for risky assets and support lending. But at the initial stage, we are most likely to see the sales of the euro as the currency with lowered rates. Looking back to December, after the publication of the first 3-year LTRO the euro held to the same level for a few days at and then began to decline. It must be noted that then the euro sales were accompanied by the growth in stock markets, in contrast to what we had observed earlier. By the way, is it possible to say that with draghi's getting into office and the unfolding debt crisis in Europe the euro will become the funding currency? It all depends on how long it will take Europe to handle its current issues. So far treatment deals only with the symptoms while the disease itself remains unaffected and is progressing here and there.
GBP/USD
The data on the UK lending proved really surprising. Net Consumer Credit figures, published on Wednesday, came well above the expected values and proved to be the best over the long term. This was partly a result of the government incentives to stimulate the housing market, which are now about to expire. Thus, the net lending to individuals reached 1.8 billion in January, against 0.9 billion a month ago, and became the biggest value since December 2009. However, it should be noted that before August 2007 (the time of the liquidity crisis outburst) this indicator fluctuated between 8 and 12 billion monthly. And over the last 3 1/2 years it has come as somewhat between zero and 2 billion. Thus, just as in Europe and the U.S. the issue here is not about high interest rates, but about the consumer reluctance to undertake additional obligations.
USD/JPY
Demand for dollars, generated by the fixation during the European session, forced the yen to interrupt its strengthening. The Japanese currency fell against the dollar and the pound, but remained almost unchanged against the euro. USD/JPY rose above the 81.0 level, which it couldn't reach for two days, but today the pair again has stopped ascending. It could well be the case that the yen won't show any significant dynamics today. The degree at which the Japanese rehabilitate their country is well seen in the growth of capital expenditures. The data showed a 7.6% increase in the fourth quarter after a sharp drop of 9.8% in the third quarter and of 7.8% in the second one. Not bad, but there is still so much to be done.
AUD/USD
bears didn't allow the Australian currency to gain a foothold above 1.08, finding an excuse in the sales in European markets. Actually, the stock markets have been overbought or so for almost two months. Probably, with the beginning of March we will enter a new phase of the market decline. But this hypothesis needs to be proved, as the soft monetary policy of the major central banks keeps supporting the risk demand, favourable for raw materials and such currencies as the aussie.
