The Bank of Japan do not expect fresh allegations after the meeting, which will take place early in the week. The solution will be announced on Tuesday. When approaching the end of the year the issue of strengthening the yen slightly receded into the background. A pair of EUR / JPY weakened throughout much of last week, is currently flirting with the break below 110.00. In fact, the spreads of short-term interest rates moved the Japanese yen over the last six weeks or so, while more konsolidativny tone of U.S. interest rates supported the reduction of volatility in the pair USD / JPY. Currently, there are good reasons to think that there are stronger risk inverventsy Swiss franc in early 2011.
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Cable brightened slightly in early trading in London, and now he stands at 1.5550, after the descent to 1.5480 at night. This is partly due to a slight improvement in tone in recent forecasts CBI, alleging that the Bank of England can make to raise interest rates aggressively over the next few years in order to combat the threat of inflation. A pair of EUR / GBP returned to the level of 0.8460 this morning with almost 0.85 on Friday. Last week was difficult for the pound, and he was not helped by Friday's news Lloyds a substantial increase in reserves for possible loan losses in the Irish portfolio. Worth bearing in mind the economic and financial costs of the big freeze, which hits the UK in recent days, reducing the amount of Christmas shopping, which both expect to retailers.
The single currency remained on the defensive line last night after the loss of stability on Friday. In summary, a number of factors pressuring the euro in recent days, including a disappointing lack of decisions on the basis of the EU summit, and all kinds of warnings to members of the eurozone on the downgrade. Statement by Lloyds against significant deterioration in credit quality in Ireland has not brought in on Friday or use the euro or the pound. Another reason for the sluggish euro a night was a response to the position of the ECB, which fears were expressed about how to affect the salvation of the Irish Bank on its activities from a legal perspective in the context of its location in the Eurosystem in exchange for access to liquidity. In fact, the ECB wants to make sure that if the bank that provides loans, becomes insolvent, will not be forced to deal with "haircuts. " Finally, the dollar and Swiss franc benefited from the flow of funds into "safe havens" in response to heightened tensions on the Korean peninsula, which slightly damaged the euro.
Suisse showed the worst results against the dollar among major currencies since the beginning of the week. Domestically, it is quite to be welcomed, if you will be overcome by an annual minimum below 0.95. More importantly, the pair EUR / CHF held above the level of 1.30, after a brief flirtation with this level yesterday. Domestically, we have seen that the unemployment rate remained stable seasonally adjusted at 3.6%. These results came from a downward trend throughout the year to date, but current levels are still above the minimum in 2008 of 2.5%. Prospects for the Swiss is still very much connected with the global appetite for risk, as well as developments in sovereign debt, and SNB did not really want to further strengthen the Swiss franc in early 2011.
Decision of the Reserve Bank of Australia to keep rates at 4.75% was expected, not least because of the tightening in the last month, which was seen partly as a proactive measure. The accompanying statement reflected the fact that the rate "above average" are considered by the growth of economic prospects. Market is modestly assesses the chances of further tightening by the RBA in the coming months, so while there are benefits from this, the less likely it will happen in the coming months. All this combined with rising expectations of policy tightening in China against the backdrop of rising inflation, especially food. This will help keep dust curry currencies in early 2011. Technically, the rally from a pair AUD / USD looks a little tired.
The yen weakened slightly during the European session. At least, this means that the yen slightly adjusted after growth on Friday against the background of the employment data from the U.S.. This information was relieved to perceived Japanese authorities. While yesterday talked about the probable need for further quantitative easing by the Fed, the continuation was not followed because of fear of the forex market that the dollar will go to growth, supported by the comments of Bernanke. This is the correct score markets, in our opinion, and if the market it will be followed by the further reduction of the pair USD / JPY should be limited.
The pound is still well behaved this week, although it would seem, must fall the most. Data on industrial production and manufacturing this morning was mixed: the main index ind. Production lost 0.2% as compared to the previous month, manufacturing grew by 0.6% compared to the previous month. Were more unstable elements of industrial production, such as oil and gas, together with mining operations, which are dragged down production in November. Thus, the markets were not too worried. Meanwhile, these studies BRC, that measure retail activity, proved to be stronger with a total growth of 2.8% y / y. Nevertheless, the same figure from the store turned out to be much weaker and 0.7% y / y. Again, these data were not strong enough in order to assess the response of the market. Pound is likely to fluctuate until the end of the year amid falling liquidity with no clearly defined direction.
Signals that are received after the monthly meeting of finance ministers in Brussels, is not encouraging. The views of German Chancellor Merkel to outweigh other opinions, and this means that no new measures to combat the spread of the crisis will not, but the current size of the fund EU / IMF regarded as sufficient. In addition, the debt issuance (or common European bonds) is officially not even discussed. Euro is not at hand, these events, although the overall picture, they have no effect. The results of the meetings this week show that, from the meeting of Heads of State at the next one should not expect a strong pan-European consensus. EUR / USD pair went to an increase from the level at 1.30 earlier this month, and now looks tired technically against Momentum indicators that have unfolded in the direction of descent.