EUR/usd
The negative sentiments in regard to the USA can cause both decrease and increase in the dollar. It depends just on how much bad news is released. If there isn't much negative, the CB and the government are expected to handle this by making monetary or fiscal policy less tough. However, if the market believes that the slowdown will spread to other economies and require more money infusions (meaning that it will lead to the increase in the deficit budget), the negative news from the USA can be of benefit to the dollar. The market simply considers that in other countries the things will turn out even worse, so the capitals come back home, where the market liquidity is higher. Last week we again saw that the dollar was eagerly bought on the release of poor news. That means that the state of affairs is so bad that the capitals have set out for a safe haven. The additional proof of it is that the ECB has again got down to action. As follows from the previous experience, the European CB comes into play just in the nick of time. On Friday the ECB announced that it would reduce the rating threshold for collateral bonds. This step is done to maintain the potential volume of bonds which can be on the bank balance after the rating cuts in several countries and banks are performed. The liquidity crisis again threatens the European financial system. The decision of draghi and Co could be called drastic and salutary if it had happened a bit earlier. But now easing of collateral requirements will just help to maintain the status quo. All this largely explains the current reaction of the market. Within the first minutes after the announcement the euro speculatively rose from 1.2525 up to 1.2580, but in about half an hour was back again. Today, without any significant external news, the currency has gone below the starting level of the market reaction to the news. The market was again skeptical about the measures taken by the EU officials. So, there's nothing left for us to do but wait for news from the USA. The new home sales figures are scheduled for release today. The upward trend, observed from August 2011 to February 2012, has sharply reversed over the recent months.
GBP/USD
Just like on Friday today the sterling also faces the lack of economic statistics. However, it doesn't make the currency less interesting for trading. On Wednesday after the release of poor employment data and also on the milder than expected MPC meeting minutes the bears locked in a decisive combat with the bulls and won the victory. As seen, even on Thursday the strong retail sales figures failed to strengthen the pound. On Friday the attempt to consolidate was as well followed by a drop. As a result, the pound hit a new local low at 1.5550. Today against the background of slack trading, the pound is again consolidating. Or probably the bears are just gathering their strength now.
USD/JPY
The flight-to-liquidity has also affected the USD/JPY rate. Having risen above 80.50 by the end of trading on Friday, the currency pair sank down to 80.10 this morning. It was caused by slack dynamics of the Asian bourses. As to the pegging of USD/JPY to the dollar dynamics, we should note that the pair usually goes down at the time when the dollar appreciates on poor news, of course if there are no interventions from the FinMin.
AUD/USD
The aussie is again a step away from the parity. This time it threatens to break it in a top-down way. When bouncing off the 0.9580 level the Aussie broke even above 1.020. However, now it looks more like a temporary bounce before breaking through the important support level at 0.9550, which is vigorously defended by the bulls. Last week it became known that Russia is buying AUD. It has already done that in the previous periods of uncertainty. However, it hasn't produced much impact on the Aussie dynamics.
