Market Review for April 25

The absolute star of the market on Thursday became the GBP, has received support from strong economic data. Interestingly, the single currency has not been able to follow the example of European counterparts. As a result, EUR/USD ended the day near 1.30 and GBP/USD — in the area of ​​1.5430.

EUR/USD continues to return to the level of 1.30, despite the confident attempts to break through 1.3070, observed during yesterday’s trading. The pair reached the 1.3092 peak right before the release of U.S. data, but with the release of a report on the U.S. labor market all hopes collapsed. The pair has returned to the area of ​​1.30 to the closing.

Britain’s GDP was higher than forecast, dispelling all fears of a recession in the final transition of the economy «Albion». In the 1st quarter, an increase of 0.3% versus the expected 0.1%, due to higher activity in the service sector, as well as the restoration of production of oil and gas in the North Sea. This helped GBP / USD from the opening level of 1.5261 to reach 1.5478 high, but closed in the area of ​​1.5430.

USD/JPY and does waited for news from the Bank of Japan. Yesterday the pair did not even reacted to the decline in the number of applications for grants b/d U.S.. Figure dropped to 6-week low at 339 thousand from 355 thousand, marked last week. Thus, the pair opened the day at 99.49, 98.98 slid down to a minimum and back to 99.30 at the close.

Forecast for Friday, April 26, 2013

And here again the next time «H» it is for the USD/JPY. In addition to the Bank of Japan meeting we will see Kuroda’s performance and publication of half-yearly report on the economic outlook. Given the perfect inertia and unwillingness to Japanese investors rather switch their attention to foreign bonds, monetary authorities may give a clearer signal for the «most cunning.» The more aggression and desire to prove that a 2% probability inflation target is achieved, the higher the chances of breaking the mark of 100 points with the further progress in the area of ​​100.40.

It is clear that the expansion of the program is not worth the wait, but the forecast increase in the rate of growth and inflation would be a logical step. The closer will be delivered 2% probability of the inflation target, the faster will be cheaper yen. If you specify the period of 2015 — breaking the mark is almost a given.

Immediately after Japan’s passion for the market’s attention will switch to the publication of the U.S. GDP for Q1. Expected to strengthen the impressive figure by as much as 3.0% q. / Sq. Here the emphasis is on recovering demand and rising inventories in warehouses, especially after a disappointing growth of 0.4% in the 4th quarter. However, we originate are concerns as to such an ambitious task in the face of falling retail sales and falling trade balance. Thus, even if the mark 100 on the USD/JPY will be broken, the pair will be more of it to keep in the case of a weak U.S. GDP. By the way, that outcome will EUR/USD is still trading week to finish above $ 1.30, near which it was from the Monday.

On the GBP/USD separately. One reason for the strengthening of yesterday’s UK GDP can be sustained labor market, which continues to show stable employment growth. Such data may well reduce the need for additional economic stimulus monetary instruments. Thus, the Bank of England could just sleep until the arrival to the place of King Carney. Weak GDP of the United States will help the pair to break 1.5470 to 1.5510 on the next goal.

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