EUR/usd
Against our expectations, yesterday proved to be quite a busy day. The initial impulse to sell the euro has been quickly played out and then followed by purchases of the currency starting at 1.2870. In the mid of the US session eurusd rose to 1.2870 at some point and during trading in Asia today almost hit 1.2880. Yet, the growth impulse is almost exhausted. Most commentators attribute appreciation of the pair to the selling pressure in the dollar, which was caused by the poor Manufacturing PMI data from ISM. Against the expected preservation, the growth rate slowed down in March. The actual figure last month made 51.3, while in February it had been 54.2. From inside the indicator it is clearly seen that the major contribution in this slowdown was made by the price constituent, which fell from 61.5 to 54.5. Yet as we approach the publication of employment data, we cannot bypass an impressive growth of the employment constituent – from 52.6 to 54.2, the highest levels since June 2012. The employment in the manufacturing sector has been growing for the previous three months at the average rate of 13K, so the March stats shouldn't be weaker. The contrast of the labour market, as expected, will become sharper after the release of the European statistics with the news on the astonishing increase in unemployment – to 12%! Should we mention that the dollar is falling on the poor data, which show quite a favourable growth rate, when Europe remains in recession?
GBP/USD
Last night the sterling-bulls took another attempt to stir the market and break through 1.5260. Earlier at the end of March such attempts had stumbled over almost two-figures-long selling. And before that, at the beginning of the previous month, heavy selling after the retracement brought the sterling down to new local lows, below 1.4850. All attention today will be kept on the lending and Manufacturing PMI statistics. The poor data will significantly increase chances of the QE extension on Thursday, putting a heavy pressure on the pound.
USD/JPY
The yen has been in constant demand this week. The slight consolidation yesterday took a turn for the further purchases of the Japanese currency. Apparently, it's all doing of exporters, repatriating their funds now. According to the Tankan statistics, released yesterday, enterprises on average expect the rate of the yen against the dollar to be at ¥85, which is about 10% lower than the average rate of March (94).
AUD/USD
The RBA has kept the main interest rate unchanged. This decision goes along with the consensus of economists, but anyway it gave rise to impulsive purchases of the aussie. Apparently, traders had built the probability of the rate cut or the direct hint on this step in the near future in the rates. audusd shot up to 1.0477 from the daily low of 1.0384, however now the pair is consolidating at 1.0450, pending a series of stats from Europe.
