Week report by FxArsenal.com

Previous week elapsed in rather slow manner for U.S. economy. It brought solely four significant data releases, which general outlook was good for Dollar. Indubitable highlight of previous week was Ben Bernanke speech on “60 minutes” CBS program, presented on Sunday.

Despite broadcasting interview on Sunday, some significant content leaked on late Friday and was partly discounted on EURUSD and USDJPY charts. Dollar reached on both mentioned pairs its two and three weeks lows. Leaks were stating that Bernanke does not rule out extra round of QE and will surely make any effort to thrust entire QE2 600 billion dollars on market. FED Chairman countered concern of surge in inflation by stating that FED has highly handy tools to lower inflation and slacken the economy almost immediately. Leaks stating maintenance of dollar printing program were confirmed on Sunday, but didn’t cause any further dollar depreciation. Subsequently this week, weekly Initial Claims were released. 421 thousand individuals field for the first time for unemployment benefits. This figure was 5 thousand better than forecast value and 17 thousand better than previous one. Current indication is in line with ongoing economy recovery, which can be noticed on the chart below.

On Friday we got acquainted with two considerable U.S. economy indications. Namely, Trade Balance and Prelim UoM Consumer Sentiment. Both figures improved in reference to forecast and previous values. The October good Trade Balance is second in row improvement of this indicator. It rose 5.9 billion in reference to September revised lower Trade Balance and was 4.8 billion better than expected. Current change was driven by 0.9 billion decline in import and 4.9 billion export improvement. Survey of about 500 consumers rating economy condition, University of Michigan Consumer Sentiment rose 2.6 points in comparison with previous month and 1.8 points higher than expected. It is important to notice underlining upward trend in this indicator that started in June 2010.

Most weighty information that overwhelmed other releases coming from Europe were brought once again to light Irish issues. Ireland reverberated when Fitch brought down Irish long-term rating from A+ to BBB+. Change was driven by increase in fiscal expenses caused by financial support that Ireland granted to its banking system. Another factors that influenced rating change was generally slackening Irish economy and sharp surge in cost of debt. In addition last week brought leaks stating that Irish Labor Party will vote against accepting 85 billion euro bailout.