EUR/USD, GBP/USD. 

Yesterday the Bank of England published Meeting Minutes. The decision to keep the monetary policy was taken unanimously. In the protocol it was said that the rates would not be raised for some time after the rate of unemployment would have reached 7% target, which kept the British pound until the close of the session (-15 points). On the whole, the report was neutral and optimistic. It almost copies Ben Bernanke’s night speech, which in its turn was similar to Janet Yellen’s speech in the Senate. It looks like that Mario Draghi accepted the slash of the rate being under the pressure of the Fed. It should be taken into account, when we will hear emotional speeches about the possibility to introduce negative rate. In fact, Draghi will restrain until the utmost moment.

US Retail Sales in October grew 0.4% vs. forecast for 0.1%. Core Retail Sales grew 0.2% vs. forecast for 0.1%. US Existing Home Sales in October reduced 3.2% and total 5.12 million (y/y) vs. 5.29 million in the previous month. After the news was released, there was information that the ECB considers the possibility to introduce negative rate for the banks at the level of -0.1%. The euro plummeted, as we can consider as close of speculative longs. Probably, it is the pound’s turn. Later Goldman Sachs increased the US GDP forecast in the fourth quarter from 1.5% to 1.6%.

The Meeting Minutes were as a cold shower for the investors after Jannet Yellen and Ben Bernanke’s calming speeches. The major idea of the document was the intention of the committee members to start trimming until the univocal signs of improvement on the labour market are seen and announce the schedule of reductions. However, taking into account that revised data on Nonfarm Payrolls three-month average is 200,000 growth, it looks like QE3 will start in December.

Today positive data on PMI Manufacturing and PMI Services in the Eurozone is expected. CBI Industrial Order Expectations in the UK in November is expected be 0 against -4 in October. If data is not worse than expected, the consolidation of the euro and the pound before further decline is probable. The first target is 1.3345/70, then 1.3300 for the euro. For the British pound the first target is 1.6060 and the second is 1.6000.  

AUD/USD.

Recently, oil extraction has increased considerably. Saudi Arabia has reached 10 million barrels a day, North Dakota has set its own record at 1 million barrels a day. Oil has not grown for the whole week and restrained the growth of the Australian dollar. Yesterday data on US oil inventories was released. The index showed decline from 2.64 million barrels to 0.37 million vs. expectations for 0.9 million barrels. Oil grew 0.3% and restrained the Aussie a little bit amid the consolidation of the US dolalar. Non-ferrous metals grew 0.17%, gold dropped 2.43% as a result of Fed’s report release and it dragged the Australian dollar downwards. It looks like oil will be declining amid fears about QE3 cut since December and cannot support the Australian dollar.

We expect further decline of the price to 0.9220, the low of September 13, then we expect the price in the range 0.9085-0.9115.