Another member of the Commonwealth of Independent States (CIS) devalue its currency. Azerbaijan devalued its currency with 35%. The official rate of the Azerbaijani Manat against the USD set by the Central Bank on 21st February 2015, was 1.05 manats for 1 USD, compared to 0.7862 manats for 1 USD a day earlier.

“This decision was taken in order to promote diversification of the economy of Azerbaijan, to strengthen the international competitiveness and export potential, to ensure the sustainability of the balance of payments”, said in a statement the central bank. The course Azerbaijani Manat against the single EUR also fell. The official exchange rate for 21st February 2015 was 1.1950 per EUR at 0.8934 per EUR a day earlier.

The devaluation of Azerbaijani currency was expected by the market, as representatives of the central bank has repeatedly stated that the plan more flexible exchange rate for its currency. However, the governor Elman Rustamov said that any weakening of Azerbaijani Manat will be soft. In his words, there is no reason for a prolonged weakening of the currency. The institution simply seek to follow global trends in devaluation to boost exports.

On 16th February 2015 the Azerbaijan Central Bank moved to using a basket of currencies in determining the amount of manat. The USD share in it is 70%, while the remaining 30% goes towards the EUR.

The Central Bank of Ukraine increased discount interest rate by 1.5 percentage points to 14%, while the state is experiencing serious economic problems, including high inflation and a weakening currency. The increase, which is the third this year, will increase the index to its highest level since 2001.

“Deteriorating prospects for markets and the devaluation of the hryvnia cause additional inflationary pressures will remain until the beginning of next year”, said the governor of the central bank Valeria Gontareva. “The measures taken by the central bank stabilization measures must be reinforced with tools aimed at increasing the value of the bracelet inside the country”, she added.

Ukraine is experiencing rising inflation while the country’s economy suffered from political, military and ethnic crisis in their heavily industrialized eastern regions. The consumer prices rose with 19.8% in October, after the government increased utility prices for households to meet the criteria of the international program to save the economy. Meanwhile the Ukrainian hryvnia, depreciated by 59% against the USD since the beginning of the year.

Central Bank of Ukraine stated that its decision will have minimal effect on the economy because bank lending is low due to the high risk posed by the conflict in the east. Institution predicts that Ukraine’s economy will shrink by 7% this year.

The USD started the week on the way finished last, namely sales. Losses for the greenback due to exported Friday report on changes in non-agricultural employment in the United States, which somewhat disappointed investors. Data significantly reduced bets on early increase in interest rates by the Federal Reserve. The USD retreated from the peak against the JPY after last week reached a 7-year high. The greenback lost positions against other leading currencies against exchanged after Friday published a report on changes in non-agricultural employment showed that the economy added 214,000 new work places in October. At the same time the expectations of analysts was for 235,000 new job positions. The comments of the experts is that the disappointing data on the change in non-agricultural employment have enabled market participants to collect part of the profits generated through the strong upward movement of the USD in recent days.

The weaker data on the labor market in the US is not a cause for serious concern, as the market continues to expand with over 200,000 jobs per month, which is the main target set by the government. On the other hand, the discrepancy with the expected values in the workplace once again put the spotlight on the Fed. The speculation of an early increase in interest rates vanished completely after Friday’s report, which proved further pressure on the USD. According to a survey 62% of traders believe the Fed will raise rates until October 2015. For comparison - in late August, 80% of respondents thought that the Fed will begin to increase in interest rates not less by the end of July 2015

The USD has appreciated by 1.8% in October against a basket of 10 major currencies. Thus the USD was the strongest performer currency while at the bottom of this list ranks the JPY, which in the same period lost 4.5%. One EUR is exchanged for 1.2490 USD exchanging near the highest values today. The paid GBP/USD is around 1.5910, just about the highest daily value. At the same time USD is trading around 114.00 JPY.

The USD with small growth before Fed meeting minutes. The document is awaited with interest, as it may shed more light on the plans of central bankers at the moment, which will begin to increase interest rates. At the same time the demand for the JPY as a haven asset increased after the International Monetary Fund shrank its forecast for global economic growth. The eyes of market participants in today are focused on the meeting minutes of the Federal Reserve of the United States, which was held on 16th to 17th September. The document will become clear whether central bankers discussed the question of the moment will start to increase interest rates.

The timing of the rise in interest rates is very important for the market because it will cause a major restructuring of the portfolios of investors and increase the appetite for the USD. The last increase in the base rate was in 2006. The next meeting of the Fed will be held on 28th-29th October. She is expected to be fully terminated program to repurchase assets. At the same time the likelihood the central bank to increase interest rates to 0.5% by the end of July 2015 is estimated at 45%.

The analysts also warn that interest rates in USA will be promoted very rapidly once the process starts, and the end of next year as they are at around 1.5-2%. The JPY gained a foothold yesterday after the International Monetary Fund cut its forecast for global economic growth and led many investors to shift their focus back to safer assets. The world economy will expand by 3.8% next year, according to the organization.

This is a decrease of 0.2% compared to the forecast of July In the euro area, growth in this period will be 1.3% versus 1.5% previously announced, while in Japan the forecast was revised to increase the economy by 0.8% compared to 1.1%. The only leading economy registered an improvement in the expectations of economists from the IMF is that of the United States. The American economy will expand by 3.1%, from an estimated 3% in July.

The market adopted with negativity and the IMF report yesterday witnessed robust sales of stock markets. Of the situation won asset havens such as the JPY, CHF and gold. One EUR is exchanged for 1.2645 against the USD today. The pair GBP/USD is moving around 1.6060, having earlier reached a low at 1.6040. At the same time the exchange rate was 108.15 JPY.

The first day of the week brought heavy losses for the EUR. The optimistic mood of investors from USA, driven by good economic data that were published on Friday, gave support to the USD, which won positions against the single currency. In the early hours of trading on Tuesday the greenback managed to retain the accumulated gains Monday amid continued fluctuation in investors from Europe. The main reason for the loss of the euro was the meeting of the European Central Bank, which was decided interest rates in the region to be reduced to 0.15% and return on interbank deposits was lowered to negative.

In this way the interest rate differential between USA and the Eurozone was expanded, making the USD more attractive against the EUR. This is because higher interest rates mean overseas investors hold funds in USD, you will receive a higher return for them than if these funds were denominated in EUR. For the same reason the interest rate differential may have a negative effect on the single currency against the GBP.

Strong data on the labor market in USA, which were published on Friday, continue to support both the stock market and the USD. In addition, the comments from Federal Reserve Chairman for St Louis James Bullard, created some excitement in the markets, which also had a positive impact on the USD. Bullard said the drop down unemployment rates, coupled with encouraging economic data can make him change his mind about this, at what point should be elevated interest rates.

During the trading session the EUR is traded at 1.3595 USD, after earlier today reached a low at 1.3583. The pair GBP/USD is trading around 1.6805, being close to the level of opening. At the same time, an exchange rate of JPT/USD is 102.30.

The Eurozone banks will pay about 10.1 billion EUR to the European Central Bank (ECB) in the form of payments on crisis loans during the next week. Level is significantly higher than the expected, which will speed up draining money from the financial system of the currency bloc.

On March 19th, 12 banks in the region will pay almost 5 billion EUR in the first long-term three-year refinancing operation (LTRO). Seven other banks will pay you around 5.1 billion EUR as part of the second three-year term. The conditions of the credit have been announced by the European institutions in 2011 and 2012.

“The contractors have the opportunity to pay after one year each of the amounts, which have been distributed in LTRO on 22nd December 2011 and 1st March 2012″, noted by the ECB.

In this way the payments to the LTRO in March will be the biggest by the end of this year. European Central Bank realized long-term refinancing operation in a bid to encourage the banks to increase lending to the consumers and to speed up the economic recovery. Unfortunately, many banks simply used the cheap money to buy higher-risk government securities.

The news of the withdrawal of liquidity from the money market gave a small boost to the EUR against the USD. The EUR currency added 0.07% to 1.3878 USD per EUR.

The CNY fell after the central bank contracted the limit of the exchange rate of the local currency against the USD after the export of the country unexpectedly shrank in February. The Chinese central bank lowered the reference rate of the CNY with 0.18% to 6.1312 CNY per USD. In the absolute terms, the reduction in the rate is the highest since July 2012.

The negative movement of the Chinese currency is determined by the data of the trade balance. The exports declined by 18.1% yoy in February, which was the biggest decline since 2009. The imports rose 10.1% from a year earlier and the trade deficit became the biggest in two years. The inflation in China also slowed to 2% yoy.

The experts commented that the reduction in the daily rate of the CNY is significantly and comes along with poor data on the trade balance. This suggests a possible political intervention to weaken the CNY to the benefit of exporters. This on the other hand would mean the increase of the risks. The movements in the CNY are less volatile compared with the money of other developing countries, and the implementation of the bilateral exchange rate corridor is definitely good for market development, said the deputy governor of the Bank of China and the Gan.

Since the beginning of the year, the CNY has lost 1.5% of its value against the USD. In this way the currency has the third worst performer among the 12 most traded currency pairs in Asia.

A day before the meeting of the European Central Bank meeting and in the middle of unpredictable geopolitical crisis in Eastern Europe, the currency markets are not having strong and clean direction. The EUR is under pressure due to the instability in Ukraine on East and still growing debt crisis on South. The European currency lost 30 pips from its price during the last trading session in Europe, but still the level of the pair EUR/USD is quite high. According to many analysts the EUR is overvalued right now, as the low inflation and the reduced demand in the European Union are still problems for the Central Bank. The unemployment reports from Spain surprised the markets, but the country still have problem with young people unemployment rates, which remain higher than the usual trends. With all these factors the EUR is under strong pressure and cause large shocks during the week.

On tomorrow’s meeting of the European Central Bank should comment and consider changing of the monetary policy. The low inflation, which is still under the target level and the decreased demand of the consumers may lead the bank to change its key interest rates. However, such actions will be too hasty and will reflect negatively over the the European Currency. Even to keep the interest rate unchanged the EUR will stable enough, because of the fears from cleavage of the European Union. After the fiasco in Ukraine, one neglected and forgotten topic was about the referendum in united Kingdom for leaving the European Union. If one of the strongest economies and financial centers in Europe cleave from the Union, this will raised many questions about the stability of the currency and economy.

Also another missed fact from this week’s events was the meeting of Bank of England about the key interest rate of the country and the financial incentives. According to many analysts there is no reason the bank to change its interest rates, but may consider some improvements in their financial policy. Any changes in Bank of England will reflect the EUR and may be speculated about the possible cleave from the European Union.

On the other side of the pair EUR/USD is standing a giant economy with interests worldwide, which recovered from the crisis and which business is gaining speed. The USA is far away from the crisis in Ukraine and any interventions will be far away from its borders. Also the country is passive participant in the dialog, so its currency is free and can gain speed. The only problem for the USD might be the new plans of Obama and Republicans for the budget, but even such plans will enter into force from 2016 and there is quite much time for negotiations and agreements.

After all these facts the pressure over the EUR continue to increase and according to our point of view will not stop in the next few months. Most probably this is the reason for us to expect that the EUR will lost positions against the USD and to decrease in range between 1.3590 and 1.3640 during the next two weeks. And even in that point the EUR will be overvalued considering the current financial and political situation.

The EUR increased its price against the 10 major currencies in the early hours of the todays trading session. The growth came after the Russian president Vladimir Putin dislocated the troops along the Ukrainian border. Despite this move, the tension in the region remains high, as the presence of the military without markings on the Crimean peninsula remains. All these news reflected to the currency markets and the EUR growth to day top against the JPY and USD.

The reduction of the tensions in Ukraine negatively affected the JPY, as it was used by investors for asylum. The currency lost 0.3% against the USD today after on Monday reached 1-month low at 101.20. the USD can increase its losses against the JPY in the coming days if the geopolitical tensions deepen. In such circumstances the development of the appreciation of the JPY is likely to be limited by the Japanese central bank.

In Asia is considered that the central bankers in Japan will increase the amount of monetary stimulus to the economy to reach its inflation target of 2%. The optimistic economic news from Tokyo, showed that the economy is improving slightly managed to reduce the speculation about expansion of the monetary stimulus. At the same time if the situation around Ukraine complicates, we may see a new peak in demand for JPY, which will force the Japanese central bank to increase money printing.

The pair EUR/USD trades around 1.3760 after earlier today reached a new bottom this week at 1.3720. One GBP is exchanged for 1.6710 USD. Meanwhile, USD/JPY is traded at 101.80 with a daily low of 103.38.

In spite of the fact that Warren Buffett is well known investor with propensity to invest in alternative financial instruments and risk assets, the financier cannot be be defined as a supporter of the new market phenomenon crypto-currencies and in particular Bitcoin.

In his interview the CEO of Berkshire Hathaway analyzes many of the current issues - from the crisis in the Crimea to the digital money. He commented the Bitcoin in a curious context. According to Warren Buffett the Bitcoin is not even a currency and he will not be surprised it it disappear in the next 10-20 years. The investor said that in tough times it is important for the companies to maintain their stocks, not their capital. Buffett also recalled that he made his first investment in 1942, when the war in the Pacific was not very well doe the USA.

“The USD will be cheaper, so that money will not buy much. It will be much better if the US companies have production assets over the next 50 years than if kept pieces of paper or even worse - Bitcoins”, commented laconically the investor

Warren Buffett also said that the price of Bitcoin is not real and that crypto-currency is just not durable for exchange.

Meanwhile, the recent severe shocks on the Bitcoin market due to the problem with Mt Gox were apparently overcome. According to the report prepared by CoinDesk the Bitcoin Price Index the value of the asset recorded level of 662.52 USD compared with 518.45 USD a week earlier.