Financial News and Economical Crisis

Dynamics
dollar finished the week on a positive note, reaching the highest level since August last year against major currencies. When the pair EUR /USD fell below 1.3900 marks, the pair GBP /USD was lower than 1.6000, and the pair USD /CHF went above the 1.0600 mark. Japanese yen traded in a band against other currencies. When the pair USD /JPY back to a mark of 90.00, and the pair EUR /JPY fell back to 125.00. Commodity currencies fell against the U.S. dollar. Thus, the pair AUD /USD went below the 0.8900, the pair NZD /USD consolidated on the way to 0.7000, and the pair USD /CAD again rose to 1.0700.

Causes
favorable report on U.S. GDP for the IV quarter supported a more optimistic statement by the U.S. Federal Reserve, issued earlier in the week. Many investors expect that the key U.S. interest rates will rise sooner than originally projected. This has had substantial support to the dollar. In addition, more positive than-expected data on U.S. consumer sentiment and a high index of Purchasing Management-Chicago, have further strengthened the position of the dollar. Meanwhile, a growing fear of complicating issues in respect of sovereign debt held by Greece, the euro under pressure. Some investors now believe the Fed may raise the key interest rate earlier than the European Central Bank. This, together with debt problems in some countries in the eurozone the euro has a clear outsider. The euro is obviously led to rapid response of the Swiss National Bank. Traders said the bank had intervened in the foreign exchange market at the beginning of the second half of the New York session, to stop the sharp rise in the Swiss franc.

What to expect?
next week is very rich in important macroeconomic data and events. The focus will be to find the meeting of the central banks of Australia, Britain and the eurozone, and the event will be publishing a report on the labor market in the U.S. in January. Perhaps in anticipation of these developments, positive expectations will contribute to further growth of the U.S. dollar, while a strong report on the labor market is able to accelerate this momentum.
At the same time, this will also be presented a series of important data that might impact on the currency. In particular in the United States will be published recent data on income and expenditures of consumers, the price index for personal consumption, as well as the production index of Institute of Supply Management. Strong performance can support the dollar, while unexpectedly weak data is likely to provoke its correction.

In the euro zone and Britain today, will be presented to PMI in production in January. It is expected that in the euro zone, they are consistent with the preliminary assessment, whereas in Britain it would decrease slightly. Moreover, in the UK will present the latest data of the Bank of England lending. According to forecasts, in December saw an increase in credit activity. In the aggregate, the data are unlikely to have significant impact on the European currencies, but in the case of more positive than expected rates of decline against the dollar may be suspended.

Tomorrow morning the Reserve Bank of Australia will announce the next decision on interest rates. Given recent data on inflation in Australia, it is expected that it will again be raised by 25 bps This is likely to have limited support for the Australian dollar, whereas, greater tightening of monetary policy could provoke a marked increase.

Why worry?
On the background of published data can not be ruled a sharp increase in volatility and multidirectional movement of the main currency pairs involving the U.S. dollar.

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