Hi, I’m Nathalie Woods and this is your
UFX Markets Week in Review. Today, we will cover some of the major events of the past
week and discuss how they impact the global currency markets.
European finance ministers met last Friday, followed by a meeting of ministers from all
27 European Union countries on Saturday. Euro-area and EU leaders meet today and another Euro
summit is to be held on October 26th- the deadline to finalize a plan for the Euro bailout
fund. The fund is expected to lay out measures to decrease Greece’s debt without sparking
a default in order to protect banks from the fallout and to ensure that Italy and Spain
are not influenced by contagion from the debt crisis.
France and Germany have had differences on how to broaden the power of Europe’s bailout
fund, with France recommending that the fund should receive a banking license allowing
it to borrow from the European Central Bank. Chancellor Angela Merkel of Germany has stated
that the resolution of Europe’s crisis will only occur if European countries cut their
debt and live within their means, citing Italy as an example of extravagant government spending.
Although President Barack Obama stated that European leaders should lay aside their differences
to resolve the debt crisis, Merkel also pointed to the US government for failing to adequately
manage its own debt. The Euro increased 0.83% against the US Dollar
last Friday and was last seen trading at the 1.3893 level.
The British Pound rose to a 6 week high versus the US dollar as Britain’s budget deficit
narrowed more than forecasted during September. The Pound advanced 1.07 percent against the
US Dollar to the 1.5958 level last Friday. The Canadian Dollar finished the week at 1.0061.
The Canadian Dollar versus the American Dollar and the Bank of Canada will keep its overnight
lending rate at 1 percent. The US Dollar declined last week against the
Japanese Yen to a post-World War 2 low on rumors of monetary easing by the Federal Reserve.
There is also increased concern about efforts by the Japanese government to reduce advances
in its currency. The Dollar fell to 76.26 against the Yen on Friday, after dropping
last week to the post World War II low of 75.82 yen. This marked the biggest weekly
decline in the US Dollar since August 12th. The Japanese yen was the best performer last
week rising 0.9 percent, while the Euro dropped 0.3 percent.
In Commodities, fuel demand in the US increased 2.5 percent in September as manufacturing
growth led to increased fuel consumption. Last Friday, the price of Crude oil increased
for the first time in 3 days on speculation that European leaders will make a deal to
contain the region’s debt crisis. Crude Oil was last seen trading at 87.40, which
is an increase of 1.55%. Well, that’s all the time we have for today.
I hope you’ve enjoyed this week’s review and you’ll join us next week. Until then,
be sure to visit us at www.UFXMarkets.com for all of your online trading needs. For
UFXMarkets, I’m Nathalie Woods. Good luck and happy trading.