Fundamental review of Forex market for Jan,14

Today everybody is waiting for the ECB decision regarding further monetary policy. It is expected that the key interest rate will be remained at the same level of 1%. Meanwhile, the concerns about the aptitude of Greece to take control of the growing budget deficit has raised. This, in its turn, slightly supported the US dollar versus the Common European Currency. The following is said in the ECB report - “The suggested measures may negatively affect on market liquidity, especially on the back of current unfavorable conditions in the Greek economy”. This is the Central bank opinion on concerning the Greek legislative proposal about the restructuring of companies debt. The survey results, conducted by the US Federal Reserve System, showed that the American economy is moving to the recovery, but herewith a lot of problems are observed in order to guarantee the maintaining of the key interest rate at the level close to zero.

The FRS report on the 12 Federal Reserve districts, known as the Beige Book, demonstrated a slight improvement in economic activity. At the same time this report did not persuade investors that the FRS would be able to raise interest rates in short – term outlook. The labor markets in the most parts of the country still weakened, though the Fed of New – York announced about “moderate rise” of employment, but several companies of services sector in Saint Louis reported about their plans to hire more employees. The Beige Book data will be used by the US Central Bank during the FOMC meeting on January 26 – 27, where the regulators are going to determine the further monetary policy. New Greek Prime Minister George Papandreou said on Wednesday that Greece would not abdicate from the Euro or ask the International Monetary Fund (IMF) for support, while the group of technical experts from the IMF started their mission in the country which will last for a week.

However, investors continued to exert pressure on the Greek stock and bonds market. The Euro probably is under the downward pressure and by the reason that investors take profit and change the positioning in their portfolio prior to the ECB interest rate announcement. The American stock market closed with the upturn on Wednesday as investors decided to buy the fallen down in value papers of financial and technological companies while they were waiting for such giants as Intel Corp. and JPMorgan Chase & Co. reports. The Dow Jones industrial average index rose by 0,50 % to 10.680,77 points. A wider Standard & Poor\'s 500 index increased by 0,83 % to 1.145,68 pips. The technological index Nasdaq Composite advanced by 1,12 % to 2.307,90 points.

Analyst: N. Grigorjeva.