EUR/usd

Monday started with a slight upsurge in the single currency: the buyers gradually raised the rate from 1.3015 to 1.3065. Now, at these levels the pair faces difficulties before the further growth. Now it is already hard to understand what the decline on Wednesday – Friday was caused by. Actually, lately we've heard rather good news both from the USA and Europe. Of course, the positiveness of this news is relative. Looking at it, we can conclude that it can well be the case that in the third quarter neither Europe nor the USA faced slowdown. Anyway, everything is too far from the normal economic state. Probably, it explains why the ultra-soft monetary policy of the leading CBs and high government spending, boosting deficit, scarcely help to keep the growth at the trend pace.  The same with the USA: it is expected that the annualized growth rate for the third quarter will make 1.8%. This is more than in the second quarter (1.3%) and much better than the slowdown demonstrated by Europe. Anyway, all this growth can be fully attributed to the government spending, as the budget deficit (about a trillion) is exactly equal to the growth rate demonstrated by the economy. Under such circumstances, what will we see in case of falling into a fiscal gulf at the beginning of the year? The only thing that brings some comfort in this situation is that the Fed is quite concerned about this issue and is ready to take action if the events unfold this way. The Fed holds a meeting this week. Very likely, it will prove this anxiety and contain a promise to extend the QE starting with the next year “if needed”.

GBP/USD

The British pound was at risk to fall below 1.60 this night, just like the euro which ran the risk of going below 1.30. Now it seems as if we were over the worst and the British pound is gradually going up in price during the day. It is a bit surprising that the risk demand should be very modest. Probably, the release of the GDP data (for Britain and further for the USA) and of the Fed's commentary will be able to spur the purchases of risky assets and cause the further growth of the cable.

USD/JPY

The yen remains one of the weakest currencies against the dollar. At present it is trading at 79.70. And the daily high has already exceeded the local high hit on August 20. Now the pair is at the levels which were seen in the middle of July. It is not bad in itself, but still doesn't guarantee the upward reversal of the pair, no matter how much we want it to be so.

AUD/USD

The Australian dollar also incurred losses. It has already fallen down to 1.03, though tried to break above 1.04 in the middle of the last week. The fact that the currency bounced off the lower bound of the corridor (1.0160) and didn't manage to approach its upper bound (1.06) should alert the traders. Probably, the bears have seized the initiative.