Yesterday European currencies had hard times, especially it concerned euro. The main disappointment was indices of business activity PMI in service sphere of the Eurozone – most of them were worse than predicted, what provoked breakthrough below 1.1150 and work of stops. Nobody paid attention to positive retail sales in the Eurozone. British PMI didn’t meet expectations either, and followed euro. Herewith similar American ISM increased. The data on employment in the private sector by ADP were slightly worse than predicted, still they remain at high level. Such multidirectional movement of economic indicators allowed dollar to hold the initiative at American session too. The only beneficiary of yesterday’s trades, except dollar, was Canadian dollar. But there the reason is justifiable – the Bank of Canada left rates unchanged, what deprived bears of Canadian dollar of support.
Today sessions on monetary policy by the ECB and the Bank of England will be in the focus of attention. They aren’t expected to take new steps. The Bank of England will publish only short communiqué on outcomes of the session and it will hardly cause a great excitement. Pound continues to follow other currencies, though with less enthusiasm. However, regulator’s hints of unexpected steps will do remind about themselves. But the reaction of the main European currency – euro, which will determine market’s dynamic, is less predictable. Everything depends on what Draghi will say at final press conference. Probably, he will officially announce start of assets buying-out program, which has been scheduled for the beginning of March. Probably, he will elaborate on which assets will be bought out. Since many details are already known, then during the process of his speech euro’s reaction can be contradictory and multidirectional. Today economic statistics are of secondary concern. We’d like to highlight production orders in Germany and the U.S.A. Expectations are opposite – worsened indicators in Germany and growth in the U.S.A., what only confirms the balance of power, formed in the market.
EURUSD pair overcame the expected initial aims and closed below 1.1100 yesterday, what increases chances for minimums renewal at today’s trades. We continue to hold euro’s short position, we rearranged stop at 1.1160. We expect next aims at levels 1.1020 – 1.1040, where we’re going to close the position and take a break. Now we don’t see conditions for long positions opening.
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