Weekly Market review

In the beginning of the trading week the American dollar continued to demonstrate its consolidation tendency.

In the beginning of the trading week the American dollar continued to demonstrate its consolidation tendency. According to the released information, the Abu-Dhabi authorities allocated 10 billion dollars for the Dubai World financial support. This factor had a temporary influence on the high-risk currencies’ growth against the US dollar, since the optimistic moods returned. Therefore, the EUR/USD pair reacted with its growth to the level of $1,4680, but then still dropped. The sterling followed the euro dynamics: the pound increased after the publication of the news from Abu Dhabi. Consequently, the GBP/USD pair rushed upwards to the $1,6324 mark, and then dropped again.

The US dollar growth on Tuesday was influenced by the speculations regarding the possible increase of the principal rate by the FRS due to the positive fundamentals published in the US. The released economic indicators supported the US dollar growth against the euro. The producer price index for November happened to be unexpectedly above the forecast: 1.80% against the predicted level of 0.80%. The industrial production demonstrated its growth for 0.80% while the forecast was at the 0.50% level. At the same time the disappointing announcement regarding the nationalization of one of the largest Austrian banks pressured the euro. In addition, the expectations concerning the decrease of the ZEW Survey economic sentiments index in Germany till the level of 50 resulted in the euro rate drop. Consequently, the EUR/USD pair reached its minimum at the level of $1.4500. The GBP/USD pair dropped to the $1.6200 level.

According to the released protocol of the minutes of the Central Bank of Australia on Tuesday, the speculations regarding the reduced expectations concerning the following increase of the principal rate grew, and the Australian dollar rate dropped against the US dollar.
According to the expectations, the FOMC left the principal rate unchanged on Wednesday at the level of 0,25%, which resulted in the US dollar strengthening. The fundamentals, published in the US during this day, also supported the American dollar growth. The consumer price index was at the expected level of 0.40%, the housing starts volume grew against the previous month’s level and happened to be at the forecasted level. And building permits was above the forecast and above the previous level at well. At the same time the positive Euro-zone news release rendered a temporary support to the euro. The PMI manufacturing index turned to be above the forecast, and the PMI services index happened to be above expectations as well. As a result, the EUR/USD pair managed to grow to the level of $1,4590, but then decreased to the $1,4500 mark.
The sterling followed the euro dynamics again, since its rate was supported by the released Great Britain news. The Claimant Count rate demonstrated the level of 5.0% against the level of 5.1% last month. Consequently, the GBP/USD pair reached its maximum at the $1,6410 mark, and then decreased to the level of $1,6300.
On Thursday the American dollar continued its rally and reached maximums against its major competitors. The Euro-zone news, published on Thursday, pressured the euro currencies. The Standard & Poor’s Agency reduced the rating for Greece from the previous level of «A-» to «BBB+» and stated the possibility of the further reduction. The European stock indices demonstrated decrease, which also influenced the drop of the euro rate. The EUR/USD pair reached its trading day minimum at the level of $1.4300.

The sterling also showed its drop against the US dollar. The pound was pressured by the UK fundamentals, released on Thursday. The retail sales volume dropped in November for 0.3%, when the forecast showed its growth for 0.5%. Consequently, the GBP/USD pair dropped to the level of $1,6078.

At the end of the week, the American dollar grew against the Japanese yen and reached its trading week maximum at the level of Y90,90.