EUR/usd

One can hardly recall any correct economic forecast from the IMF over the recent years, even with numerous revisions considered. For this reason, the markets didn't grieve much over the rather pessimistic comments of the IMF at the end of the last week. Besides, traders preferred not to make much fuss over the horrific figure of 4.5bln either. This is the sum which the EU banks will have to sell assets for in case the politicians don't manage to deter the spread of the crisis. Still have a look at the actual data. The decline of the single currency proved to be favourable for the industrial production. The business sentiment seems to have passed its cyclic low and consumer sentiment is also gradually getting better. Across the Atlantic, in the USA, we can observe an even more active recovery. The consumer sentiment data, published at the end of the last week, flew up to the pre-crisis highs. Yet the inflation expectations remain reserved, which will let the Fed continue its soft policy. The clear evidence of such sentiment is seen in the retail sales growth. Yesterday's statistics indicated growth by 1.1% both in the general index and in the index with car sales excluded. The fact that such powerful growth has been in place for three months in a row is especially inspiring. The annual growth rate amounts to 5.2%. And with inflation deducted (statistics for September comes out today, as expected, at the level of 1.9% y/y) the actual sales growth makes 3.3%. To add to this, the recent data on the initial jobless claims proved to be at the lowest level since the beginning of 2008. The recovery in the economy is obvious and this is likely to lead to the growth of demand for risky assets, rise in the commodity prices and decline of the dollar rate. So it's not surprising that the bears should be slowly retreating. Yesterday EUR/USD reversed on the drop below 1.29, this morning the pair is moving towards 1.30.

GBP/USD

This day abounds in statistics for Britain. The data on the consumer and producer price inflation have been recently released. The market analysts staked on the slowdown of the rate. The stake has proved to be correct. The consumer inflation has decreased to 2.2% and this means that Mervyn King once again has managed to avoid an open letter to Chancellor of the Exchequer with the explanation why inflation is by one percentage point higher than the target 2%. The Input PPI has proved to be even worse than expected – 1.2% y/y – because of the drop of commodity prices over the last couple of months. However, the Output PPI still corresponds to the inflation rate and even slightly exceeds it, demonstrating growth of 2.5% y/y.

USD/JPY

The Japanese yen is slowly, but steadily growing since the start of the week. If yesterday we didn't take that growth seriously, today's rates of about 78.90 already set us thinking about possible continuation of growth. Yet, here the history is in favour of the yen-bears. Lately USD/JPY has been unable to consolidate above 79.0. Only BOJ's interventions have helped to improve the situation, but even their effect hasn't been long-lasting.

AUD/USD

The aussie is fighting hard for an attempt to approach at least 1.03. The bulls have already done the most important thing – stopped selling of the currency and didn't let it go below 1.06. Apparently, the sovereign reserve funds keep purchasing the Australian currency on the dips despite the threat of further rate cuts by the RBA. Even with the expected cuts taken into account, Aussie assets bring more profit than the assets in the overwhelming majority of other developed countries.