Rates, risks and Co.

USD

The uncertainty in the market persists and causes her all the same: the market simply can not define a basic catalyst dynamics. Yesterday, the dollar managed to strengthen against the backdrop of a combination of factors. First, it supported the U.S. currency fall in the stock market. Second, data on the housing market were far from optimistic. In favor of the dollar went up, and the statements made by the Bank of Canada. Part of the motion can be explained by the closing of short positions on the dollar, which is now on the market excess. Nevertheless, as the dynamics of exchange is not so easy to reverse the market sentiment, which has still more inclined to purchase risky assets (the main opponents of the dollar has resumed growth).

But back all the same reasons for growth. According to a report published yesterday, the number of new buildings rose by 0.5% y /y to 590 thousand, lower than forecast (610 thousand). For the second time in three months has declined and the index of building permits, seen as a leading indicator. Similar dynamics suggests that the growth in the housing market was still due to government anti-crisis program that expires on November 30 and, possibly, even then, we again see is not encouraging indicators for the sector. And it makes me think that the economic recovery is unlikely to be rapid, which led investors withdraw funds from the assets at risk.

And what of the said Bank of Canada? Central Bank expressed concern about the strengthening of the national currency. To date, the central bank calls the growth of the Canadian dollar, a key negative factor hindering the country's economic recovery. The bank warned that it would adhere to the current monetary policy before the end of the 2 nd quarter. 2010 This gave hope that the dollar would not be an outsider in the race called the introduction of exit strategies (especially after the RBA had already begun to raise rates and even talk about that in November he will do it again). No wonder that after such comments could strengthen the dollar against the harriers.

Today's calendar is not too saturated. Perhaps, there are only 2 events that are worth special mention, and even then, they will have an impact on the dynamics only in the event that will bring something new. This is a study of the Fed Beige Book and speech Lekera. The first will see the economic picture of the region as a whole and draw conclusions about how justified optimism with regard to the processes of regeneration taking place in it. Signs that the hopes of a speedy economic recovery is clearly a hurry, can cause a wave of flight from risk and, as a consequence of the growth of the dollar.

EUR

level of 1.5000 is still as vicious. And in general this is correct, because in addition to traction to the risks of objective reasons for the growth of a common European currency not. Keep the euro below this mark and concerns that members of the ECB will hold, at least, verbal intervention (remember that from Trichet, we have heard that the high exchange rate is clearly not conducive to economic recovery and confirmation of the fact seen from the data on the trade balance). Therefore, we can say that the euro is now more focused on the dynamics of other currencies, which may shed light on the preservation of a downward trend of the dollar.

To date, interesting reports are scheduled, as, indeed, for tomorrow, so the dynamics of the currency will set technical factors. Although, of course, do not forget about the probability of new statements by the officials (in particular, performance in the European Parliament EU Commission President Barroso, J.).

GBP

Pound demonstrated slightly less volatility than the euro, but the direction of the dynamics of it differed very little. But, unlike the euro, the British have some prerequisites for strengthening. Thus, the index showed an increase in money supply, confirming the improved economic situation in the country. The total volume of mortgage lending in the UK increased slightly in September compared to August. But while buying homes remains at historically low levels against the background of a weakened economy and tight credit conditions. Supported the currency and comments by Bank of England. King noted that at some point, rates will be normalized. And here again intervened in the case of market sentiment, as not be interested in risky assets is so high, most likely, he had not ignored the phrase that is not yet known how long the rates will still remain at the current extremely low levels.

Today published the minutes of recent MPC meeting. The main intrigue in it were the outcome of a vote on the quantitative easing program. Members of the committee left it unchanged unanimously and noted that while it does not plan to expand that reinforced the optimism of investors, and supported the pound. In addition, we will see data on industry trends CBI. Most likely, the reaction to the report was not followed. But promises to be an interesting weekend, when it presented the first reading of GDP for the first quarter.

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