EUR/usd
There are good and bad news concerning the ECB. Good news is that the market is still cherishing hopes for bold moves on the part of draghi. Much is expected to be done, including quantitative easing (unsterilized bond purchases). Such steps will slightly push the boundaries of the mandate, but hardly anyone will penalize the CB, which tries to preserve the EU integrity while nobody else cannot or doesn't want to do that. Bad news is that the process of negotiating and setting up of the bazooka may take much time. Those, who have been expecting to see some action from the ECB this Thursday, may forget about it. Nevertheless, euro-traders have adopted a wait-and-see attitude, being distrustful both of skeptics and optimists. Yesterday the euro/dollar sank from 1.23 to 1.2224 first, but then recouped most of its losses, coming back to the area above 1.2280. Now the trading in the pair is flat, which cannot be said about the periphery bond market. There the situation keeps improving gradually: the required yield of Spanish 10yr bonds is 6.61%, and of Italian ones – 5.96%. The simultaneous decline of the euro and reduction of government bonds yield makes it clear that the markets are geared up exactly for QE, which can help to enhance the demand for bonds of the troubled countries and at the same time will increase the supply of the euro in the interbank market. Taking into account that the EU lending is swiftly shrinking, such run of events wouldn't be bad at all. The decrease in demand for safe assets is also clearly seen in the growth of yield on American short-term bills. Yesterday the 3- and 6-month bills were auctioned at the interest of 0.11% and 0.145% accordingly against 0.095% and 0.140% a week before. Today we'll see fresh data on the US consumer spending, income and confidence.
GBP/USD
Just like the euro/dollar, the pound/dollar is also almost motionless. Yet, their dispositions are absolutely different. EUR/USD first dropped, then bounced off the lows and now is waiting for the CBs' decisions. GBP/USD, on the contrary, grew up to the upper boundary of the trading channel and is now at the crossroads whether to rise with a very remote target ahead(the next peak is near 1.63) or slip down from the current level of 1.57 below 1.55 and probably farther to 1.53. The second variant would be more favourable for Britain, as it would improve the competitiveness of local goods and would make shopping in Albion attractive for Continent dwellers again. However, it is not all about Britain, a cheap currency is also to the benefit of the USA, and the Fed is really ingenious in its QE programmes.
AUD/USD
The aussie keeps surprising with its strength. It enjoys perfect demand even in slack trading, having decreased the correlation with the performance in commodity markets. Yet at the time, when investors leave the safe havens like American and Japanese short-term bonds, the demand for the currency is even stronger. This morning AUD/USD crossed 1.05, which is the highest level since the end of March. The decline of May has been fully recouped and the Aussie is again stepped onto the path in the sky. Though in case with this currency it's worth being ready for another lift shaft, where it can fall into.
USD/CAD
The Canadian currency has slightly lagged behind the Aussie. It is still weaker than the American dollar, but is already prepared to test the parity. The current rate is 1.0012. Thus, 70% of the USD/CAD growth in May has been recouped. Today the Canadian economy can either justify or betray the trust of the markets, depending on the country's GDP statistics for May. It is expected that over that month of decline in the markets the economy grew by 0.2% while the annual rate increased from 2.0% to 2.6%.
