Market review for 8 – 12. 03, 2010

The first day of the previous trading week saw a strong influence of the budget crises in Greece on the market. The announcement of the President of France, Nicolas Sarkozy, that the Euro-zone would be ready to save Greece, supported the euro currencies.

The first day of the previous trading week saw a strong influence of the budget crises in Greece on the market. The announcement of the President of France, Nicolas Sarkozy, that the Euro-zone would be ready to save Greece, supported the euro currencies. And the EUR/USD rate managed to consolidate around the $1.37 mark. But later on the Prime Minister of Greece, George Papandrey, mentioned regarding the possible further spread of the financial crises on the other Euro-zone countries. Consequently, the euro was under pressure again. And the EUR/USD pair demonstrated its drop to the range of $1,3630. And the industrial production volume for January in Germany, which was published on Monday, showed growth compared to the previous month’s results, but was below the forecast. This data did not render support to the euro.

The high-risk currencies were under pressure on Tuesday again. The announcements regarding the possible reduction of the Portugal rating had a negative influence on the euro-currencies. In addition, the Fitch Ratings agency expressed uncertainty, that the financial problems in Greece would be settled according to the deadlines. Therefore, the EUR/USD pair dropped and fixed its minimums at the level of $1,3535. The Fitch Ratings agency also stated, that Great Britain should reduce their budget deficit faster, since the deficit showed a considerable growth. Consequently, the sterling turned out to be under pressure. In addition, the RICS House Price Balance in Great Britain, which was published on Tuesday, demonstrated a substantial decrease. And the GBP/USD pair dropped to the level of $1,4935.

Rather diverse European statistical data was published on Wednesday. The consumer price index in Germany for February turned out to be above the forecast: its factual level 0.4% against the expected 0.2%. The monthly and yearly industrial production volumes in France and Italy grew and happened to be above the forecasts. At the same time the German trade balance dropped considerably, and the Germany export volume decreased. According to the experts’ opinion, due to the technical correction, the euro rehabilitated. And the EUR/USD pair managed to reach its maximums at the level of $1,3679, after the minimums in the range of $1,3540. Therefore, due to the increased demand for the high-risk assets, the American dollar rate decreased.

At the same time the disappointing fundamentals were published in Great Britain on Wednesday, which pressured the sterling. The industrial production volume for January dropped for 0.4% when the indicator was expected to grow for 0.3% along with the previous increase for 0.5%. The manufacturing production level decreased for 0.9% against the predicted growth for 0.2%. In addition, the political uncertainty continued to pressure the national currency as well. Therefore, the GBP/USD pair dropped to its minimums at the level of $1,4870.

On Thursday we saw the demand growth for the high-risk currencies. Some reduced pressure from the problems in Greece resulted in the euro strengthening. And the EUR/USD pair managed to reach its maximums in the range of $1.3690. Diverse US fundamentals were published on Thursday. The number of the initial jobless claims decreased in comparison with the previous value: its factual level of 462 thousand against the previous level of 469 thousand. At the same time, the unexpected reduction of the US export and import had a negative impact on the American dollar.
According to the released report of the Bank of England, the yearly inflation growth for 2.5% in Great Britain is expected. As a result, the sterling reacted with an increase against its competitors. And the GBP/USD pair set its maximum at the level of $1,5060.

The Reserve bank of the New Zealand left the principal rate unchanged at the previous level of 2.5%, which was published on Wednesday. The New-Zealand dollar reacted with a decrease against the American dollar. The National bank of Switzerland left the principal rate at the level of 0.25% on Thursday, and the Swiss frank dropped against the euro.

On Friday the high-risk currencies continued to stabilize. The EUR/USD pair closed the week in the range of its maximum of $1.3796. And the GBP/USD pair also demonstrated its growth almost to the level of $1.5200. The weekly maximum of the USD/JPY pair was set around the Y91.00 mark.

The company commenced operations in January 2007, established by a professional gold and foreign exchange dealer with over 10 years of experience. Currently domiciled and regulated in Panama.Author Risk Warning: You should not invest in FX or CFD the money you cannot afford to lose. An investment in FX and CFD is potentially risky to the investor, and in some cases the investor may not get back the amount he has invested. With... More