Forex: Thursday’s review

The euro fell against the dollar, registering with the first monthly decline since July, which was associated with the Italian political disputes about the formation of the government, as well as against decrease in the inflation rate in the euro area, which "opens the door" to stimulate the part of the central bank.

The euro also weakened against most other major currencies, after European Central Bank President Mario Draghi signaled that the ECB is not going to hold tighter monetary policy in the near future.

Note that the strengthening of the dollar did not prevent even the GDP data. A report published by the Ministry of Commerce, showing that GDP grew at an annual rate of 0.1 percent in the fourth quarter, compared with a 0.1 percent drop, which was originally reported. Economists had expected a more substantial revision to the consensus forecast of growth of 0.5 percent.

The pound was little changed in the course of trading, as the presented data showed that consumer confidence index from Gfk was -26 in February, unchanged from the previous month. Also note that this value is fully in line with economists' forecasts.

New Zealand's dollar strengthened against the U.S. dollar after the Reserve Bank of New Zealand said that business confidence rose this month to the level of 39.4, compared with 22.7 in the previous month.

The Canadian dollar fell for the first time in three days against the dollar, as data showed that the country's balance of payments deficit fell less than forecast, adding speculation that report will show that the economy contracted in December.

Note that the seasonally adjusted deficit of the balance of payments has decreased in the last quarter to the level of 17.26 billion Canadian dollars, while the data for the previous quarter, revised up to 1.04 billion Canadian dollars. Meanwhile, the Bureau of Statistics reported that the decline was the highest since Q3 2011. Also, the data showed that for the full year deficit of 66.94 billion Canadian dollars, the highest level since 2010.

Yen remains under pressure after Japanese Prime Minister Shinzo Abe nominated to head the Central Bank Harika Kuroda, currently headed by the Asian Development Bank. In an interview on February 11, Kuroda said he was in favor of additional incentive programs this year, and noted that the central bank has "significant opportunities for this."