Forex-Metal Weekly Analysis

Euro: The Euro started this week trading positively against its competitors on the background of meeting of EU finance ministers in Brussels. Tuesday saw the Euro’s big boost after the report of an agreement for providing assistance to Greece. The EUR / USD pair rocketed to the highs of $1.3295 in just 30 min time period. Later on, the euro currency pulled down giving back 100 pips on fears that the reaching agreement on financial aid to Greece will not be the end of the current debt crisis. On Wednesday, the publication of weak PMI in France, Germany and the EU as a whole had a negative effect on euro trading dynamics and pressured the currency during both sessions. Also, the announcement of the Fitch credit rating agency, which reduced the credit rating of Greece to the “C” from “CCC ” did not provide any support. The published Thursday’s results of February IFO business climate index in Germany showed a growth to the level of 109.6 points, the highest level in seven months versus predicted 108.6 points and the values for January at 108.3 points. On this positive news the euro currency rallied against its competitors and the EUR / USD pair grew up to its session high at $ 1.3342 mark. Closer to the end of this week the EUR / USD was tested the $1.3485 highs, rising by 2.8% since the start of this week.

U.S. Dollar: On Monday, against the background of positive dynamics at the Asian stock markets, the U.S. dollar fell against most major currencies. The reason for this positive was the Saturday’s announcement of Bank of the People’s of China, which reduced 50 basis points from mandatory requirements for the reserve of funds of Chinese banks. The dollar grew to a six-month high against the yen to the level of Y80.35 on Wednesday showing the clear evidence that the U.S. economic is about to recovery in the nearest future. These positive expectations were reduced the possibility of starting the 3d round of quantitative easing program by the Fed. On Thursday, the dollar fell on the background of published report on Initial Jobless Claims, the number of which remained almost unchanged, at a four -year minimum, becoming another testimony for the improvement of the U.S. labor market. As the result, this fact was prompting investors to reduce the demand for safe assets this day. By the end of the week on Friday the U.S. dollar index confirmed its decrease by almost 1.7%.

British Pound: The pound fell to lows of $1.5661against the U.S. dollar after the publication of the protocol of the last meeting of the Bank of England on Wednesday. In the published minutes of the meeting was noted that the Committee of the Bank of England expects the decline in inflation in 2012. The GBP / USD pair grew up on Thursday’s sessions, restoring yesterday’s losses. The GBP / USD couple rose to the level of $ 1.5724. Although, the report on the balance of factory orders from the Confederation of British Industry was significantly better than expected, the trading dynamics of pound did not get any effect. Toward the Friday’s close, the pound strengthened against the backdrop of a weakening dollar to this week start level.

Japanese Yen: The reason for the Japanese Yen falling on Monday was the report of the Japan government which stated that the Japan’s exports declined in January, due to the strong national currency and the weakness of World global demand. The yen dropped against almost all major currencies. The report also provided information regarding the country’s trade deficit, which widen to 1.48 trillion ¥ ($ 19 billion), while exports fell by 9.3 percent. The Yen continued dropping on Tuesday, showing that the interest of investors has changed and they likely to buy higher-yielding assets rather then hold the Japanese currency instead.OnWednesday, the representative of the Ministry of Finance of Japan said that the yen is falling due to the easing of monetary policy by Bank of Japan and the Greek agreement. As the result of this week, the Yen closed at the highest level since the beginning of this year, the Y81.00 level.

Weekly technical analysis for 27.02 – 03.03