The euro appreciated significantly against other major currencies after ECB President Mario Draghi announced at a news conference on Thursday that the bank’s decision to keep its key interest rate unchanged was taken unanimously by the bank’s board.
Despite expectations of a signal by Draghi to lower the interest rate in the coming months, he made no mention of such intentions. Along with that came news from Spain about a successful auction of government bonds.
The European single currency reacted quickly and the week became one of the most successful for the euro in recent times. The EUR/USD pair rose to 1.3336, or 256 pips, EUR/JPY added 369 pips and closed at 118.96, while the ‘dozy’ EUR/CHF also impressed with an increase by nearly 100 pips and closed at 1.2182.
Other interesting news that directly affected the Forex market came from Japan. Prime Minister Shinzo Abe presented a stimulus package worth 10.3 trillion yen ($116 billion). The Japanese government is also continuing its attempts to reduce the rate of the yen. One of the principal ways to do this is to use the country’s foreign-exchange reserves in order to buy bonds issued by the European Stability Mechanism. Those efforts by Japanese politicians’ were clearly noticed by investors as the yen experienced another week of decline in value. The USD/JPY reached 89.20, or a rise by 107 pips in the last 5 days.
Capital markets were far more calm. All US indices registered modest increases within the 1% range. In Europe, the German EUGERMANY30 and the French EUFRANCE40 lost respectively 0.69% and 0.56% of their value, but the good news about the auction in Spain led to a 3% rise of the EUSPAIN35.
Last week saw Facebook (FB) shares achieving impressive results. The social network’s shares did not stop rising, and on Friday their price reached 31.69 dollars. Appreciation of $3 per week, or over 10%, was somewhat expected. Analysts have focused their attention on the $33 price zone, which seems to be critical and crucial to the future movements of the stock price of the company.
The new week offers some interesting economic news. On Tuesday investors expect the data of the Consumer Price index in the UK, the same data on Wednesday will show the development of consumer prices in the US, and on Thursday morning ,the attention will be drawn to monthly data on unemployment in Australia. Additional action is also expected when earnings by US companies come out.
On Wednesday, Goldman Sachs Group (GS) and J.P. Morgan Chase (JPM) will announce their results from the final quarter of last year. On Thursday, American Express (AXP), Bank of America (BAC) and Citigroup(C) will show their results, and on Friday, Morgan Stanley’s (MS) completes the picture on the recent development of US companies and economy as a whole.
Source: dfmarkets.co.uk
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