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    The common currency fell, others are waiting

    The common currency fell, others are waiting
    Yesterday US inflation surprised us, in that it didn’t meet worst expectations. The basic annual inflation continues its gradual growth, coming close to initial 2 %, herewith total annual inflation decreased to zero, though minus was expected, mainly due to the base effect. Market’s reaction was quite natural – dollar increased sharply. Still, this movement was short-term for most currency pairs, almost all of them retained achievements of previous day and closed practically at opening levels. Following outcomes of the day, the common currency suffered most, contributing considerably to dollar’s index. “Suddenly” players remembered that deflation issue takes the first place in the Eurozone and quantitative easing widening remains one of options for the ECB in future. However, such sharp discorrelation of the market doesn’t give to dollar any guarantee for recapturing the initiative. 
    On the last day of the week, there are no events, which are able to change trades sharply. The Eurozone will publish common final data on inflation. The similar data on most countries have already been published, so surprises aren’t expected. The Eurozone’s trade balance doesn’t threaten euro either. Herewith, US reports, which are to be published today, have no positive for dollar. Industrial production is still feverish, the situation hasn’t changed during the year. The more sad fact is that capacity utilization is falling. If we look at dynamics during the year, then we can see that this tendency is stable. Late in the evening the data on capital flows will be published, and they can’t change the results of the day. Thus, if today reports from the U.S.A. are weak, then dollar can be again under pressure.
    Trade tactics:
    Although EURUSD pair fell yesterday, herewith forming a candlestick for engulfing against previous day, we’d prefer not to hurry with market’s reversal. Main downward price ranges stayed untouched. Now euro is above 1.1300, it retains chances for renewal of growth. In addition, there was almost no support from other currencies yesterday. The situation is ambiguous, we continue to observe. 
    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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