Weekly review for 11.04 – 15.04, 2011

Last week saw market participants mostly supporting the save-heaven currencies. The trading week started with some decrease of the euro rate, since market participants considered that the former rally of the euro was excessive. The EUR/USD traded in the range of $1,4420-$1,4480.

Last week saw market participants mostly supporting the save-heaven currencies. The trading week started with some decrease of the euro rate, since market participants considered that the former rally of the euro was excessive. The EUR/USD traded in the range of $1,4420-$1,4480. The released announcement of the Minister of Finance of Greece, that the country would need financial support, rendered additional pressure on the euro dynamics on Monday. According to some experts’ opinion, the euro was ready for a correction, and the growth period was over. At the same time the greenback received support on Monday due to the reached agreement concerning the reduction of the US budget expenses for $38 billion.

The USD/JPY pair dropped to theY84.5 level on Monday. The Japanese yen was growing against the major currencies after the 7.1 magnitude earth-quake, which struck Japan again.

On Monday the GBP/USD pair tried testing the $1,6400 maximum.According to the experts’ opinion, pound might continue testing maximum levels. The GBP RICS house price balance for March demonstrated a better result: -23% against the forecasted -24% level and last month’s -26%.

New earth-quakes continue to descend on Japan, and were the reason of the increased demand for the save-heaven assets. The national currency rate continued to grow on Tuesday as well. The risk level of NPP Fukushima was increased to its maximal point. Asian stock markets dropped. The USD/JPY grew to the Y84.40 mark.

Swiss frank rate showed considerable growth on Tuesday as well, as a save-heaven currency.

The released on Tuesday German ZEW survey (economic sentiment) showed an unexpected drop to 7.6 against the forecasted level of 11.3. Nevertheless, the euro demonstrated a positive dynamics in anticipation of the EC and IMF meeting. The EUR/USD pair reached the maximum of $1,4500, as the EC and IMF members started to prepare the financial support package for Portugal in the amount of 80 billion euro.

The GB fundamental releases demonstrated decreased inflation on the same day, which resulted in the drop of the pound against the US dollar and the euro as well. The GBP/USD pair decreased from the maximums of $1.6320 to minimums of $1.6220. Therefore, expectations for the possible increase of the UK principal rate, dropped.

According to the expectations, the Bank of Canada left the principal rate unchanged at the level of 1.00%. As a result, the greenback managed to strengthen against its Canadian competitor on Tuesday.

Tthe released Euro-zone fundamentals showed unexpected decrease on Wednesday. The Euro-zone Industrial production for February showed a decrease to 0.4% compared to forecasted 0.8%. Greece announced of the necessity to write off part of its debt, so that the normal development of the country would still be possible. As a result, the EUR/USD dropped to the $1.4450 minimums.

Diverse GB labor market data was released on the same day. The Jobless claims change for March increased for 0.7K, but the UK unemployment rate grew to 7.8% (which was below the expected level).

The released US Advance Retail sales for March decreased. But the Beige Book Economic survey publication was positive, which rendered support for the greenback and resulted in the temporary growth against its competitors.

The New-Zealand dollar reached its 5-months maximum against the US dollar on Thursday after the results of the New-Zealand state bonds auction publication, when government managed to raise funds in the amount of $556 million.Euro demonstrated growth against the US dollar during the Asian trading session, due to the speculations regarding the further increase of the principal interest rate by the ECB in a faster pace, compared to the FRS interest rate decisions. As a result, the EUR/USD reached maximums above the $1.4500 level. But the European trading session changed the euro dynamics. Concerns over the budget problems of Greece and Ireland pressured the euro. EUR/USD minimums were set at the$1.4362 mark.

Negative US fundamentals, which were released on Thursday, could not render any support to the greenback. The released producer price index dropped below expectations. Initial jobless claims volume grew above forecasts. Therefore, the EUR/USD managed to grow and closed the trading day at the level of $1.4500.

On Friday the Moody’s rating agency reduced the rating of the Ireland state bonds with a negative forecast, which pressured the euro rate.

Happy trading!

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