Review of the FOREX from 1 to 5 February

After the end of last week, the U.S. currency reached its highs in many months against their European rivals since the market opening after the weekend could be seen rolling back in the opposite direction, after which, however, the dollar was able to update their months of highs.

The main reason that led the dollar at the height of last week, investors were concerned about the problems of the state budget deficit of Greece. However, in anticipation of the publication package of essential economic data both in Europe and in the States, against the background of a gradual rise in stock indexes, market participants are gradually relaxed. Even pre-election instability in the UK, where conservatives seem to take place at the wheel, relegating the ruling Labor Party, failed to prevent the consolidation of European currencies.
On Wednesday, after it learned of the plan for approval by the European Commission in Greece to reduce budget deficits, the euro began to give more than a dollar 1.4000 (maximu1000m 1.4025), while the pound - around 1.6050. Later, however, the enthusiasm of investors pougas: publication of data on index PMI services UK showed that the index in January was not 56.5, but only 53.5. This marked the beginning of the competition USD retracement from the highs reached a week in which the pound came back to 1.5900, euro went below 1.3900 the dollar /yen could rise by almost 100 basis points to 91.00 and the pair USD /CHF - 1.0500 to fend off peak hours 1.0599.

It is also worth noting that the position of the Australian and New Zealand dollars have also suffered this week. Interest rates in Australia, contrary to expectations, were not increased, but remained stable, resulting in a country”s currency sharply on the same day cheaper by a penny, lost in district 0.8800, and then - even lower. In New Zealand, not all was right with the unemployment rate, which fell, as expected, up 6.5%, while, by contrast, rose to 7.3%. Now 1 NZD worth less than 70 cents, which has not been since September last year.

At the end of the week the dollar has appreciated further strengthened since the fall of stock indices, which began in Asia and was spreading to Europe first, and then to the States permanently alienated from the desire of investors to risk, so they rushed to sell riskier assets, including currencies from relatively high interest rates and buy dollars and Japanese yen. At the same time interest rates in the euro zone and Britain were left unchanged, but markets exaggerated news that financial problems become apparent not only in Greece but now also in Portugal. The release of positive inflation data producers and the UK figures to change the number of people employed in non-agricultural sector, which the U.S. has changed: the dollar went on and continued to strengthen, although not all the news background was in his favor. Thus, the price of British manufacturers rose more than expected, as the U.S. unemployment rate unexpectedly fell in January was 9.7%, not 10%, as expected by economists.

In the end, the end of the week for the euro gave less than 1.3700 (the minimum amounted to 1.3584), nearly 2 cents lower than last Friday. Pound fell about 350 points, lost to 1.5600. Pair USD /CHF 1.0700 figure above entrenched and could almost reach up to 1.0800. Dollar /yen is, after achieving at least a week 88.53 (Thursday) closed at 89.37. Connection blocks the same with the Japanese currency during the week fell to 300-500 points.

Forecast for next week

next week to continue the popularity will keep the U.S. dollar, but the excessive strengthening it can cause a reaction the U.S. Federal Reserve, if it starts to create difficulties for American exporters in the state budget deficit of the country. Meanwhile, if the situation around the state budget deficit of Greece, Portugal and Spain will enter the mainstream of peaceful settlement and to cease to occupy the front pages of financial publications, it will increase the probability of reversal of this trend with further strengthening of European currencies. But it is hardly possible in the next few trading days.

If last week analysts FOREX CLUB talked about that mark 1.35 euros to the dollar becomes a long-term medium-term, but now we can say that this goal is becoming closer and more likely to be achieved next week, after which the euro /dollar may continue to bargain in the lower half of the channel 1.3500-1.4000.

Pound is still in the 1.5500-1.6000, but now he will be traded closer to the support. The dollar /franc is in the long channel 1.0500-1.1000, in the shorter term, its movement will be limited to levels of 1.0700-1.0900.

From the economic news is worth paying attention to databefon foreign trade of Great Britain, Canada and the U.S., the publication of a quarterly report of the Bank of England on inflation figures British manufacturing sector, data on retail sales and consumer confidence index, calculated by the University of Michigan, USA. In addition, interest will be published and EU GDP, data on imports and exports and GDP figures for Germany and the labor market of Australia.

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