EUR/USD, GBP/USD
Political uncertainty in Europe continues to weigh on the single currency. The likelihood of creating a "coalition" with any parties like A. Merkel and other blocs is rapidly declining, it is heading towards re-elections. In order to save the situation, an option is possible in which a minority government will be formed. However, in this case, Merkel will have to cede the post of Chancellor Martin Schulz (Social Democratic Party). An additional blow to Germany was EU's decision to choose Paris as the new center for banks which are relocating from London.
Mario Draghi, who spoke yesterday with a report to the European Parliament Committee on Economic and Monetary Affairs, held a neutral tone. However, this meant that there were no positive trends - this was how investors comprehended the speech. Yesterday, US President Trump included North Korea in the list of countries that finance terrorism. This list is made up of Iran, Sudan and Syria. As a result, the euro fell by 58 points. The British pound, within the framework of free wandering, grew by 20 points on the ideas that floated in the air that the absence of a deal between the EU and the UK is extremely disadvantageous for both sides and it is advantageous to seek a compromise.
Attention was drawn towards gold's decline by 1.31%, only for the reason that on Friday there was a similar growth. This suggests that alternative tools can no longer grow and predict stronger dollar movement. As it was on September 15-16, when after a two-day drop in gold, the euro lost more than 100 points and another 200 points within a week. Producer price index in Germany in October was 0.3% against expectations of 0.2%, but the US leading indicators index added 1.2% against the forecast of 0.6%. The stock market grew by 0.13%.
On Tuesday, the European currencies are likely to continue moderate pressure. The balance of production orders in the UK from CBI is expected at 3 points - a weak figure, especially against the background of the previous -2 points. Net borrowing of the public sector in October is expected to increase from 5.3 billion to 6.6 billion pounds. In the US, home sales in the secondary real estate market in October are expected to 5.42 million against 5.39 million in September.
We are waiting for the euro at 1.1670, 1.1580, pound sterling at 1.3185, 1.3080.
USD/JPY
The Japanese yen is trying to quickly get out of yesterday's trough below 112.00 due to political turmoil in Germany and the new US exacerbation with North Korea. At the same time, it was also due to weak data on the trade balance in the October assessment that was released yesterday. The volume of exports decreased from 14.1% y/y to 14.0% y/y, with the expectation of growth to 15.5% y/y. Import increased from 12.0% y/y to 18.9% y/y. The trade balance fell from 668 billion yen to 283 billion yen, while the forecast was at 330 billion. The trade balance, taking into account seasonal fluctuations, has increased from 270 billion yen to 320 billion yen. The Nikkei 225 declined by 0.60% on Monday. Today, the Japanese stock index added 0.97%. Growth occurs on all Asian markets, and the yen will quickly attempt to return to the comfortable range of 113.20/60, even despite the weak activity in all sectors of the economy, which today fell 0.5% in the October estimate with a negative forecast of -0.4%.
Today, we are waiting for the yen to grow on data on the US housing market. On Wednesday, investors are preparing to learn from the Fed's protocols about the U.S. central bank's intentions in raising rates for the next year. American bank Goldman Sachs predicts even four increases in 2018. We are waiting for the yen in the range of 113.20/60.
