OANDA Forex Week In Review January 14th to January 18th

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by Alfonso Esparza

Greetings! 

Week in FX Europe – Juncker and Nowotny Staments Move Euro in Different Directions 

EUR/USD has taken traders for a roller-coaster ride this week, displaying sharp movement in both directions. We have seen the pair test the 1.34 level, but also fall all the way down to the 1.3260 range. The volatility shows no sign of letting up, as the euro has coughed up some of its recent gains in the Friday European session, and is trading in the 1.3340 range. The markets were busy on Thursday, as the US released a host of key economic data. Unsurprisingly, the data was a mix, although mostly of a positive nature. Market sentiment jumped as employment and housing numbers were outstanding, hitting multi-year highs. Unemployment Claims, which had looked weak earlier in January, bounced back with its best performance in five years, dropping to 331 thousand new claims. This easily beat the forecast of 369K. Housing Starts also were outstanding, improving to 0.95 million. This beat the forecast of 0.89M, and was the indicator’s highest level since June 2008.
EUROPE Week in FX

Week in FX Americas – US Economic Data Mixed as Debt Ceiling Looms 

Earlier this week, there was some negative news about global growth prospects from the World Bank. In its Global Economic Prospects report, which is issued twice a year, the prestigious institution said that global growth in 2013 would post a gain of 2.4%. This was down from the 3.0% estimate the World Bank stated in its June 2012 report. In explaining its downgrade, the World Bank noted persistent weaknesses in the economies of developed nations, citing austerity measures, high unemployment and weak business confidence. The report also sounded the alarm over the damage in market confidence due the ongoing fiscal battles in the US, and urged a quick resolution of the issue so as to ensure market stability.
AMERICAS Week in FX
Week in FX Asia – Yen Continues Weak Trend 

The yen remains under strong pressure and is currently testing the critical 90 level. The downward spiral could continue into next week, as Prime Minister Abe has been continually talking about lowering the currency’s value and has been leaning on the Bank of Japan to implement further easing steps which will push the yen down even further. Bank of Japan Governor Masaaki Shirakawa stated that the BOJ will introduce further monetary easing steps, and warned that the economy would continue to struggle due to weak global conditions. The BOJ implemented monetary easing throughout 2012, and is widely expected to follow suit at a policy meeting next week. Analysts expect the central bank to double its inflation target to 2%, which is the government’s stated target.
ASIA Week in FX


WEEK AHEAD

  • JPY Bank of Japan Rate Decision
  • AUD Consumer Prices Index
  • JPY Bank of Japan Monthly Economic Report
  • GBP Bank of England Minutes
  • GBP Jobless Claims Change
  • CAD Bank of Canada Rate Decision
  • JPY National Consumer Price Index
  • GBP Gross Domestic Product
  • CAD Bank Canada Consumer Price Index

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