Euro is testing 1.35 - 30.1.2013

Euro remained near 14-month high vs. the US dollar on Wednesday morning. However, the pair broke 1.35, reaching a value of 1.3515 at the beginning of the European session. Current levels are key levels for the currency pair due to the presence of serious resistance at 1.35, the violation of this is likely to accelerate the growth of the single currency. The key events for today will be the U.S. economic growth data for the fourth quarter of 2012, coming at 14:30 CET, and later in the evening - the outcome of the FOMC meeting. The regulator is likely to confirm its commitment to easy monetary policy until unemployment falls to acceptable levels (6.5%). Earlier in January, the US dollar was supported by statements of some Committee members saying about the need to reduce the asset purchase program in 2013. Presence or absence of such comments just may be the driver for the markets, although we will know about the details only in three weeks, when they will publish the minutes of the central bank first meeting in 2013. The euro looks pretty confident now, driven by improved business sentiment in the region and reports saying that European banks will actively return the funds received from the ECB. The holding factor for euro strengthening was the GDP statistics coming from Spain this morning. The National Statistics Institute said the index fell by 0.7% in the three months of the fourth quarter of 2012 and by 1.8% in annual terms. Both figures were worse than expected, and the results of Q4 were the worst since the middle of 2009. And all this is due to the record unemployment at 26%. British pound has managed to win back some ground against the euro on the basis of yesterday trading, but today the pair keeps trading around the 14-month high at 0.8586 set at the beginning of the week. The EUR JPY currency pair reached the highest level since April 2011 at 123.20.