Weekly review for 06-10.12, 2010

The previous trading week saw a suspension of the euro growth. On Monday euro dropped against all counterparts. Market tension over the EC meeting in Brussels pressured the euro. The previous trading week saw a suspension of the euro growth. On Monday euro dropped against all counterparts. Market tension over the EC meeting in Brussels pressured the euro. The Financial ministers of the EU countries would discuss the measures, aimed to overcome the European debt crises, the amount of the stabilization fund and the necessity of the financial support for Portugal. As a result the EUR/USD pair dropped to the level of $1,3245. After the meeting the euro decreased even more, as a result of the EU disagreement on the Ireland bailout issue. At the same time the US dollar consolidated on Monday as the euro weakened. The President of the FRS, Ben Bernanke, mentioned in his statement, that the new recession was unlikely to happen. And the greenback received additional support.

The Australian dollar rate weakened on the same day, as the speculations that the Australian principal rate would be left unchanged this week, reinforced. According to the released data, the Australian GDP showed minimal growth last week, which pressured the national currency as well. The principal rate of New-Zealand was expected to be left at the previous level as well, which pressured the New-Zealand dollar too.

On Tuesday morning the situation changed, and the EUR/USD pair strengthened at the level of $1,3370, due to the speculations that Ireland budget for 2011 should be adopted on the same day, which would allow the financial aid to be received. The maximum was reached at the $1.3390 mark. The US dollar dropped against the major currencies, since the demand for the willingness to take risks increased. It was also inspired by the statement of Barak Obama, who decided to keep the

On Tuesday rhe sterling demonstrated growth after the release of the UK fundamentals. Manufacturing production in October resulted in a 0.6% increase, which was above the expected growth of 0.3%. Therefore, the GBP/USD reached the maximum of $1.5820.

The Reserve Bank of Australia left the principal rate unchanged at the level of 4.74%. The Bank of Canada left the principal rate unchanged at the level of 1.00%, which supported the expectations. The accompanying statement read, that the Bank of Canada expressed uncertainty in further increase of the interest rates. The Canadian dollar reacted with a decrease.

On Wednesday concerns over the budget problems in Portugal and Spain continued to have negative impact on the risk sentiment. The greenback strengthened, since the extension tax benefits’ program, which was accepted by Barak Obama for two additional years, would support the further rehabilitation of the US economy. Expectations for the release of the positive fundamentals rendered additional support to the dollar. The initial jobless claims were forecasted to decrease to 425K.

The Canadian dollar demonstrated growth against the euro and the yen on the same day. The housing starts for November showed 187.2K against the expected 173.0K in Canada.

The Reserve Bank of New-Zealand left the principal rate unchanged at the level of 3.00%.

On Thursday the euro strengthened temporarily, and the EUR/USD reached its maximum at the $1,3322 level. Minimums were reached at the level of $1.3190. The euro was pressured after the released information, that Fitch reduced the credit rating of Ireland. The euro could not be supported by the released German consumer price data, which turned out to be at the forecasted levels.

According to the expectations, the Bank of England left the principal rate unchanged at the level of 0.50%. The program of the quantitative easing was left at the previous level as well. As a result, the sterling stayed under pressure against its counterparts. The Halifax house prices data, which was released, did not support the sterling.

The USD/JPY pair set minimums at the level of Y83.60 and maximums – at Y84.10. Previously released Japanese GDP turned out to be above expectations, which supported the yen.

Australian dollar demonstrated growth against the major currencies after the release of the employment data. In particular, the Employment change for November increased for 54.6K against the expected growth for 20.0K. The unemployment rate dropped to 5.2% from the 5.4% last month. At the same time there was no information supporting the possibility that the principal rate would be increased at the next RBA meeting. After that, the national currency stepped back from the previously reached maximums.

According to the expectations, positive US fundamentals were released during the American trading session on Thursday. Initial jobless claims dropped to 421K, compared to the forecasted decrease of 425K.

American fundamentals continued to support the greenback on Friday. Trade deficit showed considerable reduction below expectations, and the University of Michigan confidence index turned out to be above forecasts. Therefore, the greenback received support, and the EUR/USD pair closed the week at the level of $1,3230, and the USD/JPY was set at the Y84 price. At the same time the GBP/USD rate grew and closed the week at the $1,5800 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