The main motives for FOREX trading on Thursday are the speculations on the subject of a meeting of the world largest Central Banks’ Chairmen.It is expected that in the course of his speech, Ben Bernanke will announce about the Fed’s readiness to resume the program of quantitative easing in the US.  
Besides that, the trading activity today will be predetermined by the US jobless claims data and on Friday – revised GDP for the 2q10. Most likely, everything will get clear after the Fed Chairman’s speech.
 
Market Talk

• Westpac: S&P agency’s warning that the US should solve the problem of an increased budget deficit in order to retain its high AAA credit rating, has negatively affected the US dollar and caused a drop in the dollar index below 83.00
• RBS: Expectation of unfavorable news, will most likely, continue having a downside impact on dollar, in the run-up to Bernanke’s speech on Friday

EUR
In Eurozone we observe a favorable news background. A certain support for euro is given by the data from Germany and successful sale of short-term bonds in Italy. Consumer confidence in Italy had a neutral effect on single European currency.
 
Let’s have a closer look. German Gfk consumer confidence have beaten the estimates (actual 4.1, forecast 4). Italy, in its turn, sold 6-month government bonds valuing 9.5bln euro under 0.958% and government certificates valuing 4bln euro (maturity time - August 2012) under 1.721%.
 
Against that background, on August 26 the EUR/USD pair is demonstrating a rise from 1.2660 to 1.2710.
 
Despite the portion of favorable data from Eurozone and generally improving situation with the risk appetite, we have not seen substantial growth in EUR/USD. Inability of the given currency pair to hold above 1.27 during the last trading days may be considered as a signal towards a subsequent downtrend on euro.
 
CHF

• Commerzbank: fears regarding the possible intervention from the National bank of Switzerland are weakening as the does not see any deflation risks any more
• Philip Hilderbrand (president of the National bank of Switzerland): if the threat of deflation reasserts itself, we will take measures
• Brown Brother Harriman: EUR/CHF pair increased till the highs of the day at 1.3120 given the short positions’ closing against the weakening risk aversion. Forecast: EUR/CHF pair is likely to rise to 1.3170, which was reached during the trading on Tuesday.

JPY
The situation around yen much depends on the tomorrows a meeting of the world largest Central Banks’ Chairmen. The Central Bank of Japan is hoping that during the negotiations, after having assessed the whole situation on the world market, Japan will be given a “go” signal, aiming at weakening the yen’s exchange rate. Meanwhile, the market has taken a “wait and see strategy” which can be observed by the volatility in the USD/JPY rate at the level of 84.50-84.80.
 
Jevgeni Beloussov, analyst
of company Admiral Markets.
 
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