In the beginning of the previous trading week market participants were inspired by the released fundamentals from China. The risk sentiment grew and the greenback was pressured on Monday. In particular, the manufacturing production data in China demonstrated growth in August for 13,9%. Speculations, that the world economy rehabilitation rate was growing, reinforced.
At the same time the euro received strong support from the decision of the Basel Committee on Banking Supervision from the previous weekend, which stated that lenders would be given eight years to comply with the set capital requirements intended to prevent future crises. This ruling would not hurt the balanced banking system and at the same time was aimed to reform the risk-management system. As a result, the EUR/USD pair demonstrated maximums around the $1,2830 mark. The Australian dollar showed sharp growth as well, as a result to the strong Chinese economic docket.The oil prices increase above the $77.00 level as the demand for the raw materials in the USA and China grew.On Tuesday the EUR/USD strengthened above the $1.2900 mark and the daily maximum was reached at the level of $1.2910. Nevertheless, the euro was under pressure during the day, due to the released German ZEW survey (economic sentiment) for September, which dropped to 4.3 against the predicted increase for 10. The sterling traded in the range of $1,5340-$1,5440 on the same day. The released UK fundamentals pressured the pound. In particular, the published on Monday RICS House Price Balance for August showed a sudden decrease for 32% against the forecasted drop for only 12%. At the same time, the released on Tuesday annualized consumer price index for August demonstrated increase for 3.1% against the forecasted 3.0%, which supported the sterling.The USD/JPY rate renewed its 15-year minimums at the Y83,07 mark on Tuesday. The yen was supported by the speculations that if the Prime Minister Naoto Kan would win in the current internal party elections, the possibility for the government intervention decreased. As a result of the elections, the Prime Minister Naoto Kan won. According to the released information, the Japanese authorities intervened against the national currency and hoped that it would stabilize the FX market.The New-Zealand retail sales data for July, which was published on Monday, demonstrated an unexpected decrease for 0.4%. As a result, the national currency dropped against the US dollar, since the possibility for the increase for the interest rate reduced. On Wednesday the trading dynamics changed. The released disappointing Euro-zone fundamentals could not support the euro. The annualized Euro-zone employment for the second quarter was unchanged at the 0%, and the Consumer price index-core for August turned out to be at the level of 1.0%. We should mention, that the sterling demonstrated volatile trading on Wednesday, compared to its major competitors. The pound was influenced by the published UK fundamentals. The jobless claims grew for 2.3K compared to the expectations for a decrease of 3.0K. The GBP/USD rate set minimums at the $1.5450 mark. Its maximums were set at the level of $1.5560. Aimed to weaken the national currency, the Japanese government executed an intervention. The USD/JPY rally showed the biggest daily advance since October 2008. Due to the speculations, this intervention wasn’t a one-time initiative and was done without any support from the ECB or FRS. According to the experts’ opinion, the results of this intervention would be doubtful. The Japanese yen rate has been growing as a save-haven currency against the background of the concerns over the US economy slow-down rehabilitation rate and Euro-zone banking system instability, which continue to pressure investors today as well. The USD/JPY rate stabilized at the level of Y85,50. According to the expectations, the Reserve Bank of New Zealand left the principal rate unchanged at the previous level of 3.0% for the second time already. The national currency reacted with a decrease. The British pound was under pressure on Thursday as the negative UK statistics was released. All the retail sales indicators demonstrated unexpected reduction. On the same day according to the expectations, the Swiss National bank decided to leave the principal rate at the previous level of 0.25%. But the trailing comments led to the reduction of the national currency against its most competitors. The Swiss National Bank lowered the inflation forecast for 2010 to 0.7% from 0.9% and commented that the economic future outlook remained uncertain. Diverse US fundamentals were released on Thursday. The greenback showed decrease against the euro. The Philadelphia Fed index for September demonstrated a drop for 0.7 against the predicted increase for 0.5. At the same time the Net long-term TIC flows increased for July to $61.2B. The initial jobless claims dropped below the forecast to 450K.On Friday the EUR/USD pair reached maximums at the level of $1.3158, and the GBP/USD set its maximum at the $1.5727 mark.
