EURUSD, GBPUSD. Weak US Trade balance data did not surprise market.

Reaction to trade deficit balance was not usual, but quite predictable.

The matter is that the market has already got used to permanent expansion of trade balance for a long time, and takes such data quite easy.

Despite the record values of trade deficit the dollar practically has not changed its positions. Having tested a level of 1,2000, at the first hour after the issue of the report the eurodollar returned to limits of a currency corridor 1,1860-1,2000.

According to the Census Bureau and the Bureau of Economic Analysis of the US Department of Commerce Trade Balance data for December, 2005:

The US trade deficit balance extended up to 3-rd on size of the maximal value in December. Besides such indicator pushed a final value of trade deficit for 2005 up to an absolute peak $725.8 billion, that is 17.5 % above the value of 2004.

In December deficit was up 1.5 % from November value slightly revised to increase $64.7 billion and reached $65.7 billion. Wall Street analytics expected that the high prices for oil import and inventory buildup would keep a monthly indicator at a mark of $65 billion.

Export was up 2.1 %  to $111.5 billion, first of all owing to sales of means of production, cars and spare parts to them, and also the pharmaceutical goods.

Import was up 1.9 % to $177.2 billion, owing to record rise in several categories, including the business equipment and industrial deliveries, cars and spare parts to them, foodstuffs and drinks, and also consumer goods, including electronics.

Record trade deficiencies were with China, EU, Japan, Canada, Mexico, Southern and Central America, and also ???? members, including Saudi Arabia.

Deficit of the USA and China rose up to a record value $201.6 billion, or up 24.5 % in comparison with 2004. While the US export to China achieved a peak $41.8 billion, import fixed another record - $243.5 billion and became one of principal causes of so impressing trade deficit balance of the USA in 2005 (26 % of the total deficit).

In 2005 the USA also imported a record quantity of crude oil - on $175.6 billion at a record average price $46.78 per a barrel.

At such rates of growth, an annual deficiency of the country can come to $1 bln., Lehman Brothers senior financial economist Drue Matus warns. However, he adds that it should be afraid of only if foreign investors refuse to clear the US debts.

Investors did not dramatize a situation around the US trade deficit balance. The catalyst of the subsequent strengthening of the dollar became the oil market, or rather stabilization of the oil prices below a level $ 63 per a barrel and expectation of more determined FRS steps after record Treasury budget data.

The oil prices traded below $62 on Monday as dealers proceeded the sales caused by strong data on energy carriers stocks in the USA, despite the threat of breach of oil supplies because of growth of intensity between Iran and the West.

Futures for oil light sweet were down 18 cents per a barrel to opening of morning session in Singapore, after falling on 78 cents at closing of New York session on Friday. Oil Brent was down 13 cents to $59.51 per a barrel.

The players’ optimism improved also after the publication of record data on Treasury budget.

According to Treasury Budget report, U.S. Treasury Department, for January, 2006: proficiency of the budget extended, that is observed the second straight month.

Proficiency was up 12,4 million and made $21 million in December against Proficiency in November - $8,6 million.

The dollar hike was caused also by a technical factor - the level 1,2 is a certain magic number for the market, it is an equilibrium level between the single European currency and the US dollar. Tests of this level caused a stream of closing of protective orders of big European banks.

This weeks the whole block of fundamental news of the USA is expected, we should remember passions around Iran, which can bring down the oil market. Today in response to the USA readiness to strike rocket blows on nuclear objects of Iran - Iran has threatened with retaliation by intermediate-range ballistic missiles in Europe.

Quotations are in uncertain zone where chances both in favor of euro and in favor of dollar are approximately equal. Therefore while we remain outside of the market.