Market review for 12 – 16. 04, 2010

The reached agreement of the bail-out plan for Greece resulted in the optimism, which returned to the market on Monday. In order to avoid the default, Greece is supposed to receive 30 billion euro’s The reached agreement of the bail-out plan for Greece resulted in the optimism, which returned to the market on Monday. In order to avoid the default, Greece is supposed to receive 30 billion euro’s and the IMF will provide with additional 15 billion euro’s. Therefore, in the beginning of the week the EUR/USD pair demonstrated its maximums at the level of $1.3691.

At the same time in the threshold of the upcoming elections the political situation in Great Britain pressured the sterling. The speculations, regarding the possibility that the British Parliament would not receive the necessary majority, resumed. In addition, the RICS House Price Balance for March, which was released on Monday, showed considerable decrease compared to the forecast. And the GBP/USD pair dropped to its minimums at the level of $1.5370.

On Monday the home loans, commercial lending and the total value of loans in Australia for February showed a considerable decrease, which pressured the national currency.

The beginning of the trading day on Tuesday was still under influence of the positive Monday news regarding the decision to allocate 45 billion euros aimed to help Greece to avoid default. This fact supported the investors’ optimism. The market participants took great interest in the auction of the Greek government bonds. According to the auction results, the Greek financial instruments were realized in a greater volume compared to the expectations. The increased number of the US trade deficit in February above predictions of the experts was released on Tuesday. At the same time, the expectations regarding the possible increase of the FRB interest rate rendered support to the American dollar.

The reduction of the trade deficit in Great Britain in February, which was also published on Tuesday, had a positive influence on the sterling dynamics. As a result, the GBP/USD pair grew and reached its maximums at the level of $1.5440.

The speculations regarding the rehabilitation of the world economy and the increased investors’ interest to take risks on Wednesday supported high-risk currencies’ growth. The EUR/USD pair demonstrated its maximums in the range of $1,3670, and then decreased a little. The financial reports of the Intel Corp., which unexpectedly demonstrated a better result, had a positive impact on the investors’ optimism. The US retail sales volume grew for March, and significantly exceeded its forecast: growth of 1.6% against the predicted increase for 1.2%. According to the results of Ben Bernanke statement, the US economical rehabilitation stayed moderate, and the principal rates would be kept at the previous levels. The American dollar reacted with a decrease.

The increased investors’ willingness to take risks on Thursday was a result of the released positive data from China. In particular, the Chinese GDP growth rate amounted to 11,9% against 11,7%. But the new wave of speculations regarding concerns over the Greek issue pressured the euro. Speculations about the possibility that the allocated funds might not be enough for the rehabilitation of the Greek economy, changed the euro dynamics sharply. Therefore, the EUR/USD pair decreased to $1.3520.

Positive US fundamentals were released on Thursday. Empire Manufacturing index turned out to be at the level of 31.86 compared to its forecast at 24.00, the NetLong-term TIC Flows grew to $47,1B against the predicted amount of only $29,7B, the Industrial Production turned out to be above expectations, and the Philadelphia Fed. index grew to 20,2 against the forecasted 20,0. At the same time the initial jobless claims increased considerably: 484 thousand against the expected level of 440 thousand.

The survey, which was held in Great Britain showed a considerable gap between the political parties, which influence the sterling rate growth. And the GBP/USD pair set its maximum at the level of $1.5522, when its minimum was set at the $1.5385 mark.

Due to the released data, which confirmed the reduced US oil inventories, the oil rate showed some growth on Thursday. Its maximum was established at the $86.27 mark per barrel. During the trading day the rate dropped to the $85.60 level per barrel.

At the end of the trading week, the market participants were under influence of the released announcements regarding the Goldman Sachs accusations with fraud. Therefore, the optimism and the willingness to take risks dropped sharply. As a result, the EUR/USD pair decreased to $1.3471. The Japanese yen strengthened, as a shelter-currency, and reached Y91.87.