EUR/usd
The single currency keeps falling against the dollar. The governors of the world's global CBs in their speeches only emphasized the divergence between the US and EU policies, whereas Madame yellen was less mild about the monetary policy prospects mainly due to the rather favourable employment statistics in the recent months. Of course, here we should take into account that the strongest data were on the employment/unemployment rate, while the earnings growth and participation rate were obviously far from perfect. But this way or another the EU affairs are much worse. If the US unemployment shrank by 3.8%, the EU one declined by just 0.6%. Besides, inflation – the major target of the CBs – makes 2% in the USA and just 0.4% in the eurozone. And it means that the Europeans have a handsome space for maneuver. Yet, the traditional methods of the policy have already been exhausted. Anyway, even if the CB doesn't take any additional measures to ease the policy and only maintain the rates near zero, as forecasted, till the end of the next year, by that time the Fed will have already toughened the policy, raising the rates a few times. Such allocation of forces affects the stakes regarding the two-year loans and these stakes possess high influence on the currency rate. Hence the current state of affairs: eurusd opened the week close to 1.32 and sank down to 1.3185. This is the lowest level this year. Some support can be received near 1.31 as it was last August. But it can hardly be expected that the downtrend will stop completely under such conditions. The dollar is quite able to push the euro down to 1.30.
GBP/USD
The cable is also suffering because of the dollar strengthening in the background and continues its upward rally. The pound fell down to 1.6540 on opening of the trading day today. Though it has been gradually purchased since then, the gap of the beginning of the week hasn't been closed yet (the week started at 1.6570). Today it is Bank Day in Britain, so we shouldn't expect any important news from the country and gbpusd is likely to copy the performance of EURUSD, but probably with a slight advantage of the British currency.
USD/JPY
The morning gap of the dollar helped usdjpy grow towards the January highs. Trading is now held at 104.20, yet the upsurge looks quite confident to believe in the absence of a reversal in the coming hours and days. The dollar's rally has become quite visible. Actually we expected that it will occur earlier due to the more active easing by the BOJ, but the current variant is also not bad. In our opinion, USDJPY is able to finish the year between 107 and 110. Certain doubts, aroused by the flat trading in the first half-year, were dispersed by the strength of the current rally.
AUD/USD
The aussie feels quite good. It is quite an independent currency, which has managed to find support and quickly recover against total appreciating of USD today. AUDUSD has also fully closed the morning gap and initial decline on opening of the markets and is now again trading above 0.93. Though we don't expect any significant growth from the pair, we still need to point it out as a potentially steadier one in view of the resumed demand for the US currency. It's all simple: the Aussie has been a whipping boy for too long, and the stakes on easing of the RBA's monetary policy have been too high.
