EUR/usd
Monday's trading was mainly quiet. After the drop, caused by the results of French and Greek elections, the single currency managed to recover from 1.2955 to 1.3065. But still technically the morning gap remained uncovered. To do that EUR/USD needs to rise up to 1.3080. The old saying – ‘no news is good news' – is evermore true now. Yesterday that stance helped the euro to grow and it may do it today as well. Frankly speaking, this statement is only partially true: there was some news coming, but it was not of great importance. Thus, the German Factory Orders came in a bit beyond expectations (+2.2% against +0.5%). Still in the annual terms this indicator remains negative, showing a 1.3% decline. However, the favourable effect of this news was nullified by the Sentix Investor Confidence data. This index fell below the bottom of its December figure and proved to be at the lowest level since July 2009, when Europe was already coming out of the recession. Once again the sentiment indices point to that period, the hardest and gloomiest in the history of Modern Europe. The USA, on the contrary, enjoyed a surge in the consumer credit sector in March: 21.4bln against 9.3bln a month before. Of course, it doesn't necessarily imply the beginning of the steady growth of the indicator. The surges of the kind have already occurred before and can indicate not only the stronger confidence in the future, but also the need of Americans for credits to pay their bills. The salaries are growing slower than inflation, and the interest rates are low in accord with the historical standards. By the way, the above-mentioned news hasn't received any significant feedback from the markets.
GBP/USD
The British pound felt a bit better than the euro yesterday. It's quite natural as it is not Britain which suffers the political uncertainty now. David Cameron in his turn has confirmed that he won't give up the tough policy of expenditure cutting, despite what the newly-elected French President Hollande proclaimed. In the news background there is another story. The RICS Price Balance index unexpectedly has stopped growing: in April it fell down to -19% after -11% a month before. The BRC Shop Price Index has proved to come in below expectations, having fallen to 1.3% annually against the forecasted growth to 1.6%. It could be to the BOE's liking if it didn't signal the weakness of the recovery. Probably, the inflationary pressure in the country is not that strong as it's been feared. But will it let the BOE extend the asset purchase programme, as the February plan is already fulfilled? The market experts still keep saying their ‘no'.
USD/JPY
The Japanese yen was supported yesterday at 79.70, but still USD/JPY cannot boast steady growth and the attempts to fight for the 80.0 level keep stumbling over sales. Partially it is caused by the traditional weakness of the markets in May. After Friday's data on the labour market and uncertainty over the further saving policy of the Euro-Zone, investors have displayed a growing preference to liquidity, which can be provided by the huge Japanese debt market of government bonds.
AUD/USD
The sufferings of the aussie seem to be endless. The published data on the trade balance have showed the most prominent trade deficit for the last ten years. The decline has been caused by the reduction of exports with the imports remaining at the same level. To add to this, the Chinese proficit is no longer as steady as before and Japan has even sunk into deficit. Has the world gone mad and will exporters turn into importers? If true, it will be a strong blow for the Australian currency. But wait, the Annual Budget release is scheduled for today. Adherence to the budget balance may adversely affect the Aussie rate as it will make the RBA go to even greater lengths with its softening measures.
