EUR/USD
The markets keep going up, albeit rather unsteadily. The common currency is systematically purchased against the dollar. This week the slope of the curve is equal to the one, which was observed in the previous three weeks. Yet, so far there hasn't been even a single attempt to break lower, as it was one, two and three weeks ago. However, we should mention that opportunities for such a retracement will be quite many in the coming days. The major risk is posed by the ECB's meeting with the further press-conference of draghi, scheduled for tomorrow. Regarding the USA, the ADP employment statistics and Friday's payrolls carry with them great risks. Today's ADP release is forecasted to show employment growth at 129K against 158K a month before. It's striking that Friday's official statistics are expected to demonstrate much poorer figures. Anyway, the markets shouldn't regard this as a cause for concern. The closer to the next fomc's meeting we get the more talks about the possible extension of the asset purchase programme by the Fed we hear. This measure is said to be necessary to make up for the expiring Operation Twist. Yet it is believed that to compensate Twist, with monthly 45bln exchange of short-term bonds for long-term ones, it will be enough to expand the current round of QE3 by $25bln a month. Such readiness of the Fed to pursue a preemptive tactic makes the dollar weaker day by day, though the strength of the bulls is still to be tested at 1.3140. Now trading is at 1.3110.
EUR/GBP
Just as we supposed, the pound is losing its ground. And if against the depreciating dollar it still shows some gains, against the euro and other major currencies the sterling is a sure laggard. The reason is the coming budget report for the next year. Chancellor of the Exchequer will announce it to the public today. There's nothing left for the government to do but keep pursuing the austerity policy despite the threat of further GDP decrease this and next quarter. We hope that in the future it will play into Britain's hands, but now the benefits of sticking to austerity are not very clear: the markets don't have any doubts about the country's solvency and are eager to buy the British debts, and the economy,trying hard to recover, constantly stumbles over the austerity.
AUD/NZD
The New Zealand dollar has felt pretty well lately. Even the failures of its neighbor, the aussie, don't discourage it. For about a month NZD has been appreciating against AUD, albeit with little confidence. But the situation may change since these countries' CBs stick to different policies. Yesterday's rate cut in Australia will hardly be copied by the New Zealand colleagues tonight. Moreover, many expect that the RBA will continue rate cuts in the coming year, while with the RBNZ it's not a sure thing.
USD/CAD
The canadian dollar revived yesterday after the BOC's comments. As expected, the rate was kept unchanged, but the following commentary was quite optimistic. It said that despite the recent weakness of the economic indicators, next year is likely to bring increase in the economic growth. After this usdcad dropped down to the support level of the two-week sideways channel. The chances that this channel will be broken by a downward movement are great at the moment.
