Market Review for 04/02/2013

Asian and European trading sessions:

Euro: The EUR / USD pair started its correction falling into $ 1.3620 during the Asian session. It dropped sharply causing a decrease in demand for the European currency after the yield of Italian and Spanish bonds has grown on the background of political instability in the Eurozone’s economy. The published today forecasts by the Barclays Plc. also influenced negatively the trading dynamics of the asset. The forecast projected that the EUR / USD could fall to $ 1.32 in six months and up to $ 1.28 during the whole year, which was higher than the previous estimate of $ 1.26 and $ 1.22.

British Pound: The pound increased its relative attractiveness and retreated from its recent deep lows amid the political instability in the Euro region and the growth yield of Spanish and Italian government bonds. The GBP / USD pair rose to $ 1.5737 during the European session even not taking into account the fact that the one of the report published today showed that the activity in the UK construction sector continued to decline in January, gradually for the third consecutive month. The today’s data also showed that the number of new orders in the sector continued to decline in January showing the slowest decline since October 2012 and registered the 8th month of fall.

Japanese Yen: The USD / JPY pair rose to the level of Y93.22 during the European session and then dropped to a new low of Y92.70 as some technical indicators especially the Relative Strength Index RSI (14) signaled that the recent decline of the Japanese currency was too fast.

Australian dollar: The Australian dollar tried to grow on more adverse than expected data on the number of building permits in Australia in December. The increase was short-live as many market participants were not willing to risk in anticipation of the meeting of the central bank of Australia, which will be held tomorrow. Just a few of economists expect that the Reserve Bank of Australia will lower its key interest rate.

American trading session:

Euro: The single currency dropped against almost all major traded currencies amid speculation that the Prime Minister of Spain, Mariano Rajoy may resign after Spanish media reported that he was accepting illegal payments. The conducted recently poll showed that the former Prime Minister Silvio Berlusconi has narrowed the gap between the favorite Pier Luigi Bersani, even though his litigation related to tax evasion. The published today statistics by agency Eurostat confirmed that the annual increase in producer prices in the euro area remained unchanged in December at 2.1 % instead of forecasts of economists who projected this index to rise to the level of 2,2% .The EUR / USD couple recorded new today’s low of $ 1.3504.

Gold: The February futures price of gold rose to 1677.70 dollars per ounce. Before then the gold prices was down as improved U.S. economic performance reduced the attraction of gold as a safe investment.

Oil: The oil fell while the resumption of negotiations between Western countries and Iran reduced tension in the Middle East. Also, the falling of stock markets because of the political turmoil in Europe pressured the asset today. The WTI fell to $95.88 per barrel on the NYMEX.

Posted in: Market Review