The UK currency rose to be among the best performers to be the worst. In the past week fell in all crosses. Against the dollar (GBPUSD) failed to consolidate above the 60-day moving average periods (currently 1.5850), lost upward bias and depreciated sharply. The pair has taken up the bass and consolidated guideline below 1.55 would enable further declines in the short term to stay above we expect a recovery, at least in the beginning of the week seems limited to 1.5670/1.5730. A significant closing above 1.5850 would return the highest increases enabling upward bias in the medium term.
In the UK, the data were not entirely met good but not bad enough alone to explain the sharp fall in the pound. Inflation remains above central bank target and concerns by little they are getting bigger. Are the possible effects for the pound? Initially could push it and you could start thinking that the Bank of England would do something to address it (raise rates), but this would play against the economic activity, which weaken it, and added that in itself raised Inflation is bad, the overall effect should be negative. It is not yet a major problem, since the rate is high but is not worrying the other hand, the signal is that the central bank will pursue a policy stimulative, especially considering that the government is cutting spending and incentives tax.
At the opposite end of the pound was the Swiss franc rose in all its crosses. Thus, the Swiss currency regains strength in the same week that the central bank of that country decided to leave unchanged the interest rate. Against the euro and the pound marked record highs against the dollar and (USDCHF) broke the uptrend line that was isolated to the pair of lows. This does not necessarily mean that in the coming days will set new record lows, but the short-term uptrend has lost validity.
Among the currencies linked to commodities was the best aussie, while not fire along the market remained largely unchanged. Against the dollar (AUDUSD) has not yet been clearly back above parity level. The rate increase is not in China gave him strength to this junction. Between 0.9660 / 80, the aussie has a major support area, which if broken, could accelerate the fall. While against the dollar failed to return above the parity level against the Kiwi (AUDNZD) scored highest in 10 years.
From China in addition to not raising rates, some work, talk to the inflation target would be increased from 3% to 4%, which means that allow a higher level of inflation. This makes that measures to slow growth, can be implemented more slowly than previously estimated. Which it weakens the dollar, which is one of the most widely appreciated currencies with rate hike in China, product, among other things, risk aversion generated by this measure.
Finally, the yen had an acceptable performance. Against the dollar (USDJPY) ended without major changes after the couple could not exceed the area of 84.40 / 50. Does not succeed in the coming days, expect a significant decline in the pair.
In the rest of the market, results for the Japanese currency were mixed.
The yen's correlation with the evolution of the interest rate of Treasury securities is still intact. The recovery which had the previous week (but closed off the highs) it weakens the USD / JPY and was one reason, perhaps, why the break of 84.40, was not confirmed and the couple quickly returned below. To continue the depreciation of the yen, it seems necessary condition to continue the fall in the price of Treasury securities.
