EUR/usd

Tuesday proved to be a hard day for stock markets. Frankly speaking, it came as the worst one since the beginning of the year. Some commentators attribute such dynamics to the higher probability of Greece's default on its debt. It's no secret that international institutions are evaluating the expense at which this deadly scenario may unfold. Institute of International Finance yesterday mouthed its assessment of default in Greece, forecasting possible losses at $1 trillion. The Dutch right-wing party held its own research which showed that the bailout of the troubled countries may eventually cost 2.4 trillion. With stakes being so high, the market players' desire to give up breaking even is quite natural at the moment.  This is what Dutch Freedom Party leader advocates. With such talks around, markets keep rather skeptical about Greece's deal to get a sufficient number of claims. For now we know only about the participation of large holders, accounting for 20%of the claims. It is still far from 66% required to successfully close the deal. Meanwhile, the market is kept in suspense and volatility is gaining momentum. In our case, the rising volatility, preceded by a continuous rally, marks the market's tendency to decline. However, we will hardly see any shift in the currencies before facts come out. The end of this week may become really crucial for the further movement in the markets

GBP/USD

The sterling reveals its dependence on the stock market sentiments.  The day, which came for stock markets as the worst one since the beginning of the year, proved to be equally bad for GBP/USD and GBP/JPY. The former fell to 1.5730, where it keeps helplessly hovering now. The latter walked quite a distance away from its 6-month highs and is now trading close to 127.0. Statistics from the UK are running their course. Data on shop prices from BRC reflected the 1.2% slowdown in February's inflation pace against 1.4% a month earlier and 2.7% a year ago. The current rate of price growth is the minimal one over the last two years. But unlike the situation in spring 2010, the slowdown is likely to hold on for some more time.

USD/JPY

The market tendency to flee to safer assets has played into the yen's hands (against the Japanese government and companies). USD/JPY slid down to 80.70 yesterday. Overnight the pair made a couple of attempts to break that support line, but failed. Can we say that the pair has found its support in this area and that the sellers will prove stronger than the traditional repatriation flows? Only time will tell. However, already now it is clear that the Bank's meeting in January indicated a shift in the market.

AUD/USD

The Australian dollar keeps being a whipping boy. And the poor statistics on the country don't help this at all. Earlier it was reported that the Australian GDP grew just by 0.4% in the fourth quarter, which is twice as little as the expected figures and as the figures we saw in the third quarter. At the junction of February and March the aussie tried to gain a foothold above 1.08. Now it is hovering around 1.055.