Forex: Tuesday’s review

Yesterday the dollar rose, reaching the highest level this year against the yen, as European policy makers and Greek bondholders failed to reach an agreement on a debt-swap plan for the indebted nation, spurring safety demand.

The yen fell against 12 of 16 major peers tracked by Bloomberg after the Bank of Japan cut its economic growth forecast for next year.

The euro reached the highest level in almost four weeks against the yen earlier after a report showed European services and manufacturing industries unexpectedly expanded in January.

The pound rose against most peers after a report showed the budget deficit shrank in December more than predicted.

EUR/USD: yesterday the pair was under pressure, however was restored later.

GBP/USD: yesterday the pair has grown on a floor of a figure.

USD/JPY: yesterday the pair gain and showed new high of 2012.

On Wednesday UK data at 0930GMT includes the first estimate of Q4 GDP as well as BBA Lending data and the latest Index of Services, while at the same time the latest bank of England MPC meeting minutes are due along with the BoE Agents Report. Main European data stats at 0900GMT with the German IFO business survey. In Davos, Swiss Finance Minister Eveline Widmer-Schlumf is due to speak at 1600GMT, followed at 1630GMT by German chancellor Angela Merkel. US data starts at 1200GMT with the weekly MBA mortgage applications data. At 1500GMT, NAR pending home sales are due along with the FHFA Home Price Index and also BLS Mass Layoffs data. This is followed at 1530GMT by the weekly EIA crude oil stocks data. At 1730GMT, the US Federal Open Market Committee decision is due. Also, this time around, from 1900GMT, the Federal Reserve will publish the FOMC participants federal funds rate projections for the first time, which will be ccompanied by updated quarterly economic assumptions. After this, at 1915GMT, Federal Reserve Chairman Ben Bernanke holds a news conference to provide additional context for the FOMC's policy decision.