EUR/USD hit a new low of 1.2250 on Monday as the ECB member Nowotny warned on weak inflation and growth in euro zone. He echoed the ECB President Draghi, increasing the expectations of a full-scale QE in early 2015. There are not so many events to watch on Tuesday except for the French and German trade data. What's more, European finance ministers will meet in Brussels tomorrow. Tax on financial transaction will be in the centre of discussion. Markets are awaiting for the TLTRO auction that comes on Thursday and remain rather sceptical abour the euro's medium-term prospects. However, for now the 1.2250/00 area remains resistive.
GBP/USD has recovered some ground from the 1.5550 low on Monday. The picture still remains negative for the cable with the Britain's manufacturing production data on the agenda on Tuesday (forecast - downbeat). USD/JPY gave back some ground too after hitting a record high of 121.80 in Asia. According to our forecast, there is room for a correction towards 119 yen in the coming days.
AUD/USD gapped lower on Monday and touched 0.8270 in Asia, but the decline failed to sustain. The markets were disappointed by Chinese trade data: import shrank significantly. On Tuesday watch Australia NAB business confidence index.