EUR/usd
We have again stepped into one of these eventful weeks at the beginning of the month, when all the three news causing highest volatility come one after another. On Wednesday we'll try to make out from the commentary to the Committee's meeting if there is any change in the Fed's rhetoric. On Thursday all eyes will be riveted on the ECB's interest rate decision, where a cut to 0.5% is expected. Finally on Friday we will deal with payrolls. The market positioning before these events accounts for most market on the week's opening. The dollar is losing its ground in Asia, as market participants expect that being forced by signs of US economic weakness the Fed will soon stop its talks about rollback of the stimulus. And there is a good reason for that, as person #1 in the Fed is Ben Bernanke and he is a dove, so it's very likely that the commentary won't be more hawkish than before. Moreover, there is a chance that the Committee will react to the recent poor economic stats. Growth of stock exchanges put a pressure on the dollar last night, which helped eurusd grow to 1.3067, but then the pair came under selling pressure. As before the single currency is well sold above 1.3050. Yet, it is obvious that the currency is supported on the dips below 1.30. Most likely, the pair will be trading within this range (1.2970- 1.3070) till Thursday or even till Friday, i.e. till the ECB's rate cut and commentary or till the release of the US employment statistics.
GBP/USD
The economic growth in Britain, which became known last week, keeps telling favourably on the pound. It feels better both than the dollar and the euro. The cable is quoted already above 1.55, which was last seen in the mid of February. Thus, the pair recouped almost a half of its losses from the beginning of the year(1.6330) till March (1.4830). Apart from the general economic state, good news has come today from Hometrack in regard to the housing prices in the country. Just like in March they grew by 0.3%. In fact, this rate is the highest for the last three years for this indicator. Against such a background the sterling has the potential to grow to 1.56 during the day, yet it may face some difficulty there.
USD/JPY
usdjpy started to retrace last week and keeps doing it now. The pair has already dropped to 97.60. Earlier buyers supported the pair a figure below. It's remarkable that the pair should decline while the markets are generally positive. It is unusual as it occurs more and more often, so in the coming days the pair will probably fall farther to 96.50/60.
AUD/USD
The aussie is still trying to consolidate above 1.03. It failed to do that in the last two days, besides the stream of sales eventually left long upper shadows on the daily candlesticks. For the most part it was because it is still expected that the rate cut cycle will continue. The RBA's meeting is scheduled for the next week and, in our opinion, it is not obvious at all that the Bank will decide to ease the policy. Very often Australia and New Zealand are in one and the same phase of the economic cycle and the latter is now waiting for the right moment to toughen the policy.
