During the reporting period, the U.S. dollar not only was continuously dropping against the common European currency and the British pound sterling but also sharply depreciated against the Japanese yen.

The U.S. labor market statistics will be released on Friday, February 3, which market participants are looking forward to. Enhanced attention to this data is caused by speculations that the U.S. Federal Reserve is most likely preparing for the next round of the quantitative easing of the lending and monetary policy. 

EUR/USD traded over the reporting period in the range between 1.3023 (low of Wednesday, February 1) and 1.3233 (high of Friday, January 27). As a result, the European session closed on Wednesday at 1.3170, which signified growth of the euro against the dollar by 1.6% over the reporting period. The euro was supported by substantial growth of stock indices, prices on precious metals, and rates of riskier instruments. Interest towards riskier instruments appeared as a result of released macroeconomic data showing an unexpected boost of business activity in China, Germany and Britain. Strengthening of the euro also was promoted by expectations that this February the ECB will grant loans to European banks at a low interest rate. It is estimated that the total amount of loans can reach 325 billion euros. In addition, EUR/USD was helped by the decision of the Federal Reserve to extend from mid-2013 through the end of 2014 the time period during which the key interest rate in the U.S. will be kept at the record low level. As to the negative factors affecting the euro, one can mention the persisting circumstance that Greece still has not achieved an agreement with private investors about the terms of writing off part of the debt, despite numerous assurances that the agreement will be signed shortly. Besides, rapid growth of yields on Portuguese debt securities also put pressure on the common European currency.

GBP/USD closed on Wednesday, February 1, at 1.5830, which signified growth of the pound sterling by 1.6% over the reporting period. The rate low –1.5639 – was registered on Friday, January 27, and the rate high – 1.5868 – was reached on Wednesday.

At closing of the European session on Wednesday, February 1, USD/JPY was 76.20, which showed growth of the yen by 1.6% over the reporting period. The rate low – 76.00 – was registered on Wednesday, and the rate high – 77.78 – was registered on Thursday, January 26. The Japanese yen appreciated due to the fact that amid the uncertainty of the economic situation both in Europe and United States investors turned to the safe heaven currencies, such as Japanese yen and Swiss franc. Under these circumstances, investors started to worry about the possibility that the Bank of Japan may conduct a currency intervention.


Andrey Kiryanov
Head of Treasury Division