Today investors will be focused in the important U.S. labor market data - 7.2.2014

The (USDIDX) slightly decreased due to the ambiguous economic data on Thursday. The unemployment in the U.S. this week was less than the preliminary forecasts. However, this positive was offset by the weak foreign trade data. Exports fell by 1.8%, while imports rose by 0.3%. As a result, the deficit in December increased by 12% to $ 38.7 billion, which is worse than it was expected. Now, the Forex market participants do not exclude the possibility of revision for the U.S. GDP for the fourth quarter downward by about 0.5 %. Recall that it grew by 3.2% in the first reading on January 30. The next GDP estimate will be announced on February 28th. Today investors will be focused on the important U.S. labor market data, which will be released at 13-30 GMT (0).The preliminary forecasts are positive for the U.S. Dollar, but the intrigue still remains. The key indicator is the rate of change in the number of employed people in the non-agricultural sector (Nonfarm Payrolls). Its growth is estimated from 150 thousand to 185 thousand people.

The ECB and the Bank of England kept interest rates at current levels of 0.25% and 0.5%, respectively. The ECB President, Mario Draghi said that the EZ is not at deflation risk. This has saused a significant the Euro (EURUSD) strengthening (growth on the chart). The Bank of England made no important statements, so the Pound (GBPUSD) has not changed. Note, that next week on Wednesday we expect the quarterly macroeconomic forecast from the Bank of England. Theoretically, it can give a hint of further exchange rate movement. Today, at 9-30 GMT (0) we expect the macroeconomic data from the UK: the trade balance and industrial production in December. In our opinion, the preliminary forecasts are neutral. A slight reduction of the deficit and industrial production compared with November is expected. As for the EU, the corresponding figures will be released in Germany at 11-00 GMT (0) and 15-00 GMT (0). They seem to be negative for the Euro.

The gradual recovery of the global economy reduces the Swiss Franc (USDCHF) attractiveness as a safe-haven currency. Note that the Swiss National Bank has been maintaining the Franc above the 1.2 euro (EURUSD) for three years preventing its excessive appreciation. Since it does so, mainly due to the money issue, some of the Forex market participants count on the Franc weakening wiin the current year to parity with the U.S. Dollar (based on the support level conversion formulas USDCHF = 1,2* USDEUR). If the forecasts are correct, then the USDCHF will look rising to the maximum of the year 2012.

The Canadian Dollar (USDCAD) hardly changed. The negative growth in the trade deficit compensated for the positive PMI. Today at 13-30 GMT (0) we expect the important indicators of the labor market in Canada. Market participants expect a decline in unemployment to 7.1% and the growth in the number of employees by 20K. We believe that this a positive outlook, which may make the Canadian Dollar strengthening (falling in the chart).