US dollar is strengthened against the European currencies - 14.2.2013

The US dollar has strengthened against the most of liquid currencies today. Especially significant increase against the euro is demonstrated in the British pound and Swiss franc after the weak economic growth statistics in the eurEurozone, as well as the Bank of England report publication concerning inflation. The preliminary official GDP data for the Euriozone showed that the economy in the region keeps being in recession. It should be taken into account that there was no growth in any single quarter of 2012. The figure for the fourth quarter decreased by 0.6%, and the annualized decline was 0.9%. The concerns were intensified also by the fact that the data for France, Germany and Italy were much worse than expected, but the worst result was shown from Portugal, Cyprus, Italy and Spain. According to the Eurostat data, such weak numbers were not shown since 2009. The concern of the authorities in some countries of the monetary union is confirmed with the words by Mario Draghi, relatively strong euro has now received the reflection in the macro economic data. As a result - there was the downfall in the single currency and the downfall in the European stock markets. Today, the EURUSD currency pair has dropped to its 3-weeks lows, moving to around 1.33, although it has been trading above 1.35 yesterday. The British pound fell below 1.55 against the Greenback during the European session. The prices have not been that low since August of last year. In one of the previous technical analysis reviews, we have set the technical target at 1.5380 that the pair is approaching really quick. The latest selling wave for the British pound was caused by the quarterly Bank of England report concerning inflation, which was reflecting the weak growth prospects and the willingness of the central bank to accept the risks of inflationary pressure increase for the purpose of growth restoration. In this regard, we should exclude the possibility of additional stimulus from the Bank of England within this year. Thus the weakening pound will be only in the BOE favor. The Japanese economy growth in the fourth quarter of 2012 also proved to be worse than expected. The GDP decreased by 0.1% in the last three months of the last year, or by 0.4% in annual terms. The poor statistics, in our point of view, is an additional factor supporting the policiy by the Prime Minister - Abe aimed at restoring the economic growth. The concluded Bank of Japan meeting was also ended today, as a result the current chairman of the central bank, Masaaki Shirakawa, assured that the Bank policy is aimed to support the economic growth, and not to weaken the yen. Thus, directly or indirectly, the ECB, the Bank of Japan and the Bank of England have confirmed that they are not "against" weakening in the national currency, and the inexpressive macroeconomic data becomes the argument in favor of further easing. We continue believing that in the medium term the high risk of the euro and the Japanese yen lowering. As for the British pound, we prefer to wait for the achievement of technical target at 1.5380.