Market Review For 05/02/2013

Asian and European trading sessions:

Euro: The euro fell against most major currencies amid a corruption scandal in Spain and the growing uncertainty of the results of the parliamentary elections in Italy. The leader of the Socialist Party demanded the resignation of the prime minister. However, the Spanish prime minister categorically denied any involvement in the fierce corruption scandal. The recent news from Italy informed that conducted there public opinion polls showed that the former Prime Minister Silvio Berlusconi has narrowed the gap between the candidate Pier Luigi Bersani, even though his litigation related to tax evasion. Mr. Berlusconi is gaining sympathy to the parliamentary elections which will be held on February 24-25, because of his statement that he will terminate the real estate tax which was imposed under austerity programs of the current cabinet of Mario Monti. The EUR / USD pair fell below $ 1.3460 during the Asian session, yet rose during the European one to the maximum of $ 1.3566

British Pound: After trading in the narrow range of $ 1.5750-63 during the Asian session, the GBP / USD pair strengthened to $ 1.5802against the published report showed that the activity in the services sector in Britain unexpectedly expanded in January, indicating at the same time that the economy can avoid a triple recession. In details, the data recorded that the purchasing managers' index for the services sector rose in January to a level of 51.5 and beat the predicted value of 49.5. Meanwhile, in line with the increase of orders, the company raised the number of personnel to the maximum value in the last six months. However, despite the positive results of the report, the pound fell sharply and the GBP / USD pair fell to the lowest today’s level of $ 1.5708.

Japanese Yen: The yen rose against most major currencies on the back of weak Asian stock markets and the increasing demand for safe-haven currencies. The yen then fell against all major currencies when the governor of the Bank of Japan Governor Masaaki Shirakawa informed about his earlier retirement at March 19 rather than planned on April 8. The USD / JPY pair rose to a new high of Y93.51 during the European session.

Australian dollar: After the Reserve Bank of Australia kept its benchmark interest rate unchanged at 3%, which agreed with the forecast of analysts, the Australian dollar fell against all major currencies.

American trading session:

Euro: The euro rose with association of the release of data that showed that the final purchasing managers’ index for the euro area services sector rose in January more than was originally reported. However, the demand for the currency was limited and currency remained under pressure, as many market participants are waiting for the meeting of the European Central Bank, which will announce the decision on the interest rates in the Euro zone. The EUR / USD pair rose to a maximum of $ 1.3597 during the session.

U.S. Dollar: The pressure on the dollar currency was provided by the statistics from the U.S. ISM Non-Manufacturing Composite index that came out higher than expectations in January, up to 55.2 versus expectations of 55.0. At the same time, the index of economic optimism IBD / TIPP rose to 47.3 in February from 46.5 in January, against the forecasts of 46.1.

Gold: Earlier, the price of gold rose to 1683.45 dollars an ounce after strong data from China and Europe data, although at the COMEX the prices were reduced by the unfavorable U.S. macroeconomic statistics and the February futures price of gold dropped to 1666.53 dollars per ounce.

Oil: The Oil futures grew by 0.9% on U.S.PMI in January that indicated growth in activity. The March futures price of WTI rose to the level of 97.04 dollars a barrel on the NYMEX.

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