EUR/usd
Yesterday the US dollar was evenly appreciating during the day. The bulls' attack, which drove eurusd from 1.3755 to 1.3815, proved to be short-term. It occurred when ECB Governing Council member Ewald Nowotny told MNI that the ECB would have to put up with the strong euro as it doesn't have any tools to combat it. Soon the downtrend resumed and the pair closed the day at 1.3740. Now the downward movement is still going on and the local low has been set at 1.3730. Quite likely, the bearish attack will be getting momentum. The dollar's appreciation is mainly connected with expectations of the neutral message from the Fed. Now the market's opinion is divided regarding the date of the first cut in the bond-buying programme – in January or March. Though yesterday's reaction presupposes that tapering will start sooner due to favourable corporate reports, it is still worth considering the recent economic data. Yesterday's retail sales against the expected growth by 0.2% demonstrated a decrease by 0.1%. The decline of PPI by 0.1% against the expected growth by 0.2% can also be treated as negative news. Worse than expected, these data arouse cautiousness regarding the forthcoming statistics, which can be affected by the partial government shutdown. Other things being equal, that news caused depreciation of the US dollar, yet before that the currency had gone through heavy selling, so there was no chance to sell further. Thanks to the recent correction the dollar index shifted away from the lows of the beginning of the year. With the index being at 79.0, the US currency, with rare exceptions, has received strong support from the very beginning of 2012. It is quite possible that this time the bulls will feel really in command of the situation. Yet, at present it is hard to imagine that the US statistics may contribute to this. It is likely that European affairs will get worse.
GBP/USD
The sterling continued sliding down and yesterday it approached 1.6000. Carney was lucky to head the bank in the period when the economy began to show noticeable revival. The BOE's head pointed out yesterday that the housing market was entailing recovery. However, exactly now it is important to be cautious as this market also demonstrated strong activity in the previous years, but that always ended with a drop to the same levels. Now we can count on formation of an uptrend, but it is dangerous to suppose that it will be forming without corrections. The UK household deleveraging is not even half way.
USD/JPY
The growth of Asian and US markets supports appreciation of usdjpy. Yesterday the pair managed to consolidate above 98.00. And though now the upward move has stalled, there is some reason to suppose that should the dollar be supported, the pair will go up.
AUD/USD
Unlike the ECB, the Central Bank of Australia still has opportunities to ease the policy in traditional ways. The RBA's head made it clear yesterday. He said that in a while the AU dollar would probably get lower than now. Since the markets had already corrected their positions in the aussie before, the currency was not strong enough to continue its decline. The AU dollar has received support at 0.9450 and is now flirting with 0.9500.
