Last Friday differed little from other days of the week. The market closed almost in the middle of weekly range, which was quite limited itself. Terrorist attacks happened in Paris late at night and the market didn’t have time to react to it. The reaction was late – only after today’s opening of the market the common currency dived under 1.0700, and this pressure can provoke renewal of monthly minimums.
For one more week the market will live waiting for actions by main regulators in December. Market players laid on increase of rates in the U.S.A. and widening of stimulation programs in the Eurozone. Still, no one is fully confident, therefore we see rushing in limited ranges without substantial progress. Players prefer to react to current events on the fact. This week the report on inflation will be most important for dollar. Forecasts promise some revival of prices, though it isn’t exactly. Weak report will again corrupt faith in coming increase of rates, moderate growth will retain these hopes. Besides, the U.S.A. will publish minutes of last FOMC session, industrial production, capital flows and first reports on housing market for October. Minutes are unlikely to add something new in understanding the Fed’s actions, the market has already shown active reaction to outcomes of last session, little has changed from that moment. Other indicators aren’t stable, we will see the reaction only on the fact. There are few events in the Eurozone. The most interesting is ZEW report on moods among investors. So, limited reaction to ZEW can be expected, despite the significance of this report.
Speaking of local data, pound has most eventful program – inflation, retail sales, and budget execution. The overall impression of forecasts is uncertainty. Expectations of increase of rates by the Bank of England have lowered, still hopes remain. This week pound’s dynamics can slightly differ from the general dynamics of the market depending on actual data. Besides, Canadian statistics are also of interest – retail sales and inflation. USDCAD pair has again reversed upward and approached annual maximums. Positive data are able to provoke one more strong correction. We don’t know what to expect from the regular session of the Bank of Japan on monetary policy. Expected widening of stimulation policy didn’t happen at last session on the 30th October. The regulator didn’t give into this pressure. Still, it doesn’t exclude that this can happen later. Surprises are possible with corresponding reaction of yen.
Now, at the opening of the market yen has strengthened against Friday’s closure against the background of terror acts in Paris. Even weal statistics on GDP, published at Asian session couldn’t prevent it. The use of yen as a shelter-currency in such cases played part. However, weak statistics won’t give Japanese currency grounds for more substantial strengthening, and we expect renewed pressure on it. During this day final data on inflation for October will be published in the Eurozone – the significance is low. Expected speech of Draghi can add more troubles to euro, if he talks again about the necessity of stimulation measures. In the second half of the day NY production activity will be published. Its significance is also low, still, forecast is favorable for dollar.
Having received one more blow from terrorist attacks in addition, euro’s prospects look weak. To aggressive traders we recommend considering pair’s sale from current levels 1.0720 – 1.0740, stop at 1.0860. Aim is at 1.0610 – 1.0630.
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