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    The exchange market lacks single dynamics

    The exchange market lacks single dynamics

    Yesterday euro’s fall was rapidly bought out. ZEW report, which exceeded forecasts, contributed significantly to it. The result was euro’s return above 1.1400. Still, Greece remains a constraining factor. However, the market’s behavior indicates that players continue to hope that the compromise will be achieved. Yesterday late in the evening new messages appeared that Greece would ask to prolong assistance program the next day. Such decision will become a strong driver for growth of the common currency. Yesterday British pound was out of luck – the report on inflation was weaker than expected, after what it decreased by almost a figure. Nevertheless, there is still quiet. This week there are several important reports ahead, which are able to change the situation.

    Today the main news background is from the U.S.A. – producers’ prices, building permits, new houses laying, industrial production. Forecasts are contradictory, and actually, it seems to have become the norm. Something is better, something is worse, and generally American economic indicators have no advantages over European ones any more. Accordingly, we see fluctuations in the range without notable movement in the pair with euro too. The reaction to today’s statistics is unlikely to change – the movement direction will be chosen depending on degree of discrepancies with forecasts. Herewith, we have to repeat: Greece, Greece, and Greece. Any positive or negative concerning this issue will provoke sharp activation of the market. In the evening minutes of FOMC last session will be published – nobody expects surprises. This time interest to minutes can be limited due to expected speech of the Fed head Yellen in US Congress next week.

    Speaking of local data, pound is again in the focus of attention – minutes of the Bank of England last session and the report on labor. This time pound’s prospects are more encouraging. Especially, if minutes show that the issue of practicability of increase in rates was discussed at the session. Unemployment situation is still stable, and even is gradually improving. Pound has opportunities to regain yesterday’s losses.

     

    Trade tactics:

    Yesterday we renewed long position on euro from 1.1360. As we have already noted, in the short term long positions remain most preferable tactic. Short-term prospects are locked on Greek issue. Any compromise can provoke significant growth of the pair.

     

    Any opinions, advice, news, research, analyses, prices or any other information presented on this webpage is provided as general market commentary and does not constitute investment advice. "Vector Securities" shall not be liable for any loss, including loss of profit, which may arise directly or indirectly from the use of this information.


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