USD at a low
The dollar which is measured by the US Dollar index has had a pretty bad week declining to the 80.15 region. A rise in the risk sentiment of the traders has led to this steep decline in the safe haven currency from the 81.30 level on Tuesday to the present low of 80.15. The holidays of Thanksgiving and Black Friday led to the diminishing of liquidity. The future of the index depends upon the risk appetite of the traders and the results to the ongoing fiscal cliff negotiations to bear some fruit.
Greek aid hopes make the euro rise
Friday saw a rise in the euro as there were indications of positive news from the negotiations to give aid to Greece and a survey found that German data is showing improvement in this economy. The euro rose to the level of $1.2943 crossing the resistance level of $1.2910. It was just at the level of $1.2941. There were hopes of the deal on Greece to succeed due to the relaxation of debt cutting target for the country by the International Monetary Fund. This meant an easier path for the clearing of the loan tranche to be made available to Greece to fight the debt issue. The euro zone finance ministers, the International Monetary Fund and the European Central Bank had earlier failed to reach an agreement to bring the debt down to a sustainable level
Rapid change in the Japanese yen
The Japanese yen had risen in January and March as it acted as a safe haven due to the ongoing European debt crisis, slow growth in China and an overall weak global economy. The Japanese Yen was less reliant on borrowing from overseas and the Yen proved to be the most attractive currency among all its competitors. The yen increased in value so much that the export based Japanese economy started taking a hit. The Japanese yen is now seeing a reversal against the dollar due to the Bank of Japan’s intervention and Japan’s trade deficit. The soon to be Prime Minister is aiming at infinite easing of the currency to meet a 3% inflation target to provide growth to the Japanese economy.
Crude oil closing at a high
Crude oil ended up stronger last week at 88.28 in a week that saw a mixture of increased oil demand, political pressure, violence and unrest between Israel and Hamas. A ceasefire was made possible at the end of the week by the global leaders. The shooting of a Gazan protestor by an Israeli soldier could have proved to be disastrous, but the ceasefire was still maintained. Positive industrial growth data has increased demand for crude oil and combined with the probabilities of disruptions in the crude supply is leading to a rise in oil prices.