It was a bit of a rollercoaster last week. That statement could have been applied to any of the last few weeks. It was just more of the same up and down in tandem with the equity markets. WE saw, once again, just how much a piece of news could influence the currency markets.
After the relative confusion the European Central bank seemed to be at the start of last week, the positive numbers helped the Euro to rise substantially against the dollar. Things seem to be getting better in Europe. There is more news next week for Europe. If the
positivenot so negative trend continues, then it is likely that the dollar will lose more ground against the Euro.
Not so for the pound. It wasn’t able to stand up to the dollar as well as everyone else last week. Fundamentally, Britain is still in serious trouble. A different picture from some months ago. At that time, it seemed that Europe was in much bigger trouble than the UK. A lot of people reiterated the thought that England not joining the Euro was a good idea. They heaved a sigh of relief as Europe suffered…at least more than Great Britain did. Now, I am not sure what they will be doing, as figure after figure comes out showing that the UK is on a much longer path to recovery than the European entity. It might turn around soon, but for now, it looks like the Pound will have more work to do to stop itself from falling considerably against the Dollar. The lack of news affecting the Pound directly this week will probably be a sigh of relief.
The commodity currencies did well in Forex Trading this week. The Canadian Dollar did well as Oil rose a little. The Australian Dollar and its cousin the New Zealand Dollar also did well. Risk appetite returning also helped these pairs. The thing now is that things are not perfect in these economies. The Central banks for all of these are poised to take some action. A Rate cut is definitely expected in New Zealand. This might mean that a loss of value against the Dollar might occur, depending on what decisions are made.
Much to observe this week. Will keep you folks posted.