In Focus Of CB Meeting - 4.2.2013

Last week was ended on a positive note for the single currency. The Friday data showed that the situation in the regional manufacturing sector improved slightly. PMI Manufacturing index rose to 47.9, against expected 47.5. Meanwhile, the U.S. labor market statistics was mixed. The Non – Farm Payrols increased by 157000, a little worse than it was expected, and the unemployment rate rose to 7.9% - a negative signal to the US dollar dynamics. As a result, EURUSD reached a new local maximum at 1.3710. Today, it is trading in the range 1.3618-1.3652. The key event for the euro this week will be the ECB meeting scheduled on Thursday and the subsequent Mario Draghi’s press conference. The recent rapid strengthening of the euro, on the one hand, reflects the improved market sentiment and hopes for a speedy recovery in economic activity of the region, but on the other hand - it can have a negative impact on exporters and it also turn into a constraining factor for the growth. The RBA and BOE will also hold meetings this week. They will be held on Tuesday and Thursday respectively. Markets do not expect any surprises or changes in monetary policy, but both of the regulators are likely to leave the room for easing the policy within this year. If the restrained tone of the politicians is confirmed, the Australian dollar and the British pound are unlikely to find serious support.