Market review for 19 – 23. 04, 2010

In the beginning of the previous week the investigation over the accusations of Goldman Sachs Group Inc. in fraud continued to render negative influence on the dynamics of the major currency pairs. In the beginning of the previous week the investigation over the accusations of Goldman Sachs Group Inc. in fraud continued to render negative influence on the dynamics of the major currency pairs. But the company denied committing any illegal acts. At the same time the negotiations of Greece, the IMF and the EC government leaders were transferred due to the eruption of the volcano in Island. This issue also influenced the euro drop. The high-risk currencies were under strong pressure. Consequently, the EUR/USD pair decreased to $1.3414, but rehabilitated by the end of the day. Therefore, the American dollar strengthened as a shelter-currency. But at the second part of the trading day after the release of the positive information regarding the financial standing of some leading American companies, the market situation changed and the high-risk currencies started to rehabilitate.

Positive Euro-zone fundamentals were released on Tuesday. In particular, the ZEW survey (economic sentiment) index in Germany for April grew and turned out to be above its forecast: 53 against the expected level of 45.1. The producer price index in Germany for March demonstrated its growth as well: 0.7% compared to the expected 0.5%. Due to the above, the euro managed to show a considerable increase. But the published information regarding the Greece issue pressured the euro again. The released speculations that Greece might need additional financing to overcome the crises, and that allocated funds might not be enough, resulted in the sharp euro drop.

The positive UK statistics supported the sterling, which was under pressure before due to the new wave of concerns regarding the upcoming elections planned to the 6-th of May. The consumer and retail price indices for March demonstrated growth and were above the forecasts. Therefore, the GBP/USD pair grew to the level of $1,5430, but then the rate decreased.

The speculations regarding the possible principal rates increase by the Bank of Canada resulted in a sharp growth of the Canadian dollar against the US dollar. As for the Tuesday’s publication, the principal rate was left at the previous level of 0,25%.

On Wednesday the deficit problems of Portugal and Spain continued to influence the general financial situation in the Euro-zone. The speculations, that the ECB would not increase the principal rates for a long period of time had additional pressure on the euro. And the EUR/USD pair set its minimums at the level of $1.3354. At the same time the American dollar happened to be under pressure after the release of the positive financial reports of Apple and IBM, which in turn resulted in the stock markets growth and optimistic moods of the market participants.

The sterling consolidated on Wednesday due to the unexpected positive news. The Claimant Count rate change in Great Britain amounted to 4,8% in March instead of the expected 4,9%. And the GBP/USD pair showed its maximum in the range of $1.5439.

On the same day the oil rate demonstrated its growth to $84.02 per barrel. And due to the increased market participants’ confidence level, the gold rate grew to $1,142.90 per ounce.

On Thursday the euro demonstrated a significant drop in spite of the published positive Euro-zone fundamentals. The Eurostat published the revised data on the budget deficit of Greece, which turned out to be more, than it has been released before. In this connection, the Greek problems, as well as the budget deficits of Portugal and Spain continued to dominate the market. We should also mention, that the Euro-zone PMI services and manufacturing indices showed increase. But this data could not render any support to the euro. And the EUR/USD pair dropped sharply below the level of $1.3300.

During the whole week the USD/JPY pair traded in the range of Y94,30 – Y91,65.

On the last day of the trading week the EUR/USD pair managed to rehabilitate until the level of $1,34.

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