Greenback started the period in a gloomy mood as on Wednesday and most of the Thursday it was hovering around 0.3% below the base (opening) value. On Thursday, however, the unexpected cut of the ECB benchmark rate and better than expected U.S. Advance GDP and Advance GDP Price Index data boosted the currency almost full percent, After that greenback slowly trailed close to base value, but remained above it. Additional boost came on Friday when U.S. Non-farm Employment Change and Unemployment Rate numbers came out significantly better than expected. Weekend and Monday had no significant fundamental releases which kept the greenback stable.
Although Tuesday was heavily loaded with the UK data it provided additional indirect boost to the dollar as numbers on various Price Indices were substantially worse than anticipated. Apparently this created a strong ripple effect across the markets and effected greenback indirectly.
In the period of interest greenback showed gains against all of it’s major counterparts. The most modest ones were against Euro, Swiss franc and loonie—0.27%, 0.39% and 0.34% respectively. The largest ones were against both oceanic currencies, the aussie and the kiwi, and Swedish krona—2.09%, 1.75% and 2.03% respectively. Results with the European currencies can be easily explained by the ECB rate cut and UK’S data on Tuesday, whilst aussie and kiwi suffered from worse than expected Australian labour data.
Swiss franc remained close to it’s base value during Friday, weekend and Monday. We have to point out that equally-weighted index of the currency gained 0.2% around 8 GMT, but there is no particular reason behind it. We are seeing quite different view on Tuesday, 12th of November. Index gained 0.7% in the course of 7 hours when data of the various UK’s price indices was released. After that we saw some minor turbulence on Wednesday, during the releases of the Eurozone’s Industrial Production and U.S. Federal Budget Balance. In the end, however, this did not have any lasting effects on the CHF index as pair ended the period wit 0.6% up from the base value.
Due to the 1.2 cap between the Euro and Swiss franc it is a rare case that this currencies would move in to absolutely opposite directions. However, this could be seen on Friday.
During the period of interested CHF gained across most of it major counter parties except the Euro and the United states dollar. Losses in these two cases were equal to 0.42% and 0.08% respectively. Highest gains were registered against the Yen and the Swedish krona—1.98% and 1.53% respectively. Minor gains, 0.07% and 0.04%, came from the crosses with the pound and loonie. Oceanic currencies, the aussie and the kiwi, allowed the franc to gain 1.19% and 0.59% respectively. In the later case it should be due to the lasting aftermath from Australia’s employment figures.
Single currency undergone two appreciation periods in the last week, on Monday and Tuesday, and remained rather stable for the rest of the week. It gained approximately 0.4% on Monday. It is hard to attribute these gains to any of the fundamental events as it started more than hour before the release on the only Eurozone related news that day—Italian Industrial Production. Second rally took place on Tuesday during the releases of number of UK’s price indices. As results in most of the cases were worse than anticipated it redirected capital flows from the GBP to EUR and CHF which both gained approx. 0.5% during that period.
Single currency index was rather stable for the rest of the week. There was some ups and downs during the releases of some of the data but single currency index finished the week with 0.9% up from it’s base value.
Euro gained against all of it’s major counterparts last week. Smallest gains, 0.31%, 0.21%, 0.51% and 0.15% were registered against the GBP, CHF, CAD and NZD respectively. Gains against USD were almost whole percent which could be explained with unemployment and trade data on Thursday. JPY depreciated the most of all major currencies last week. As a consequence Euro booked a substantial 2.15% gains against it. It was causes by substantially worse than expected GDP numbers from the Japan.
From the performance of the indices we can see that USD was second worst performing currency after the JPY, which suffered heavily from GDP data. Getting back to the USD, it took first hit during the 10-y Bond Auction after which the index value was 0.5% below the base value. It recovered during the testification of designated Fed Chairperson and remained just slightly below the base value until Friday. All of the data related to the US came out worse than expected which sent the pair to trail lower until then end of the Analysis period ion Tuesday. Since Unemployment Cost Index came out as expected and FOMC members did not present any surprises USD index ended the period with 0.9% loss.
USD index being the second worst performing in the last 5 days explains why it showed losses against almost all of it’s major counterparts. It booked a 0.5% gain against JPY, but that is understandable as JPY index was the worst performing index last week.
A lot of this could be easily attributed to the worse than expected data releases on Thursday. However, it seems that testification of designated Fed Chairperson the same day outweighed the effects. Another significant moment took place on Friday when all of the data came out worse than expected which in relation to the previous events ignited a significant bearish sentiment in the market. At the same time, other currencies were seeing rather neutral or mildly positive data on their side.
GBP index was the best performing currency index in the last five trading days. It ended Friday just slightly above the base value. Monday was rather disappointing for most of the currencies as data from the Europe and the US caused some turbulence. After that, the GBP index remained slightly below the base value until Thursday when BOE Asset Purchase Facility Votes and Official Bank Rate Votes came out. They showed that committee members are united on the outlook of the UK’s economy and do not plan to change their policies soon. This empowered the GBP index to gain almost full percent in the upcoming day.
It was a substantial boost for the GBP taking in to account that UK’s Public Sector Net Borrowing and Industrial Order Expectations had effectively no effect on the pair of Thursday. It ended the period of the analysis with 1.1% above the base value.
Having all of this in mind it does not come as much of a surprise that GBP booked gains against all of it’s major counterparts. Smallest gains can be seen against euro, greenback, franc and krona, but they are no less than 0.4%. Largest gains, 1.82% and 1.73% were booked against the yen and aussie respectively. This is not surprising as the two were the worst performing major currencies in the last 5 trading days. Lonnie and the kiwi were not far behind. Gains against them where 1.33% and 1.28% respectively.
Taking a look at the performance of the currency indices we can see that the single currency was mediocre last week. It was mildly outperformed by the other European currencies, but was quite ahead of all the other major currencies. It was hovering (+/- 0.3%) around it’s base value until Thursday. Monday had no particularly important data coming out. Since German ZEW index came out exactly as expected Euro didn’t move anywhere. It gained value through the US data, but the change was up to 0.1%. Wednesday caused some turbulence as better than expected CPI and retail sales data from the US caused the Euro to dip below the base value.
We were seeing completely different view on Thursday. It was rather heavily loaded with events and data releases in the old continent. Euro index started gaining value even slightly before the Manufacturing data was released. Data came out largely as expected, which was a good sign since the situation is at least stable. This provided a needed impetus which allowed the pair to close the week 0.9% above the base value.
As mentioned before Euro index was mildly outperformed by other European currencies which got marginally stronger boost form data releases on Thursday. Other currencies showed significant underperformance against the Euro—from 1.56% to 2.52% if we exclude greenback.
At the beginning of the period U.S. CPI numbers made US dollar index to gain almost 0.5%. PPI number the next day pushed the index further. At that point it was 0.9% up from it’s base value. Friday was relatively slow as not much related to the US dollar was taking place. Even the data that was coming out and events that were taking place were largely as expected. As a consequence the index remained just slightly below the +1% mark. Mondays’ pending home sales data had no effect on the market whatsoever. As you will see later on, even market volatility didn’t increase much above the long term levels.
Tuesdays data mostly came out better than expected, but surprisingly had no effect on the performance of the US index as well which ended the period of the analysis with 0.8% above the base value.
Greenback showed the best results against the aussie which started trailing lower since the very beginning of the period. It’s index value ended the week 3% below the base value. Greenback’s gains against the aussie were 3.43% in the period. Another oceanic currency, the kiwi, was not far behind. Greenback managed to gain 2.14% against it. USD showed losses against all of the European currencies, but losses were relatively low—from 0.03% against the Euro to 0.51% against the Swedish krona.
Looking at the graph of equally weighted currency indices it becomes obvious that it wasn’t the best week for JPY index. It outperformed only the indices of the two Oceanic currencies, the aussie and the kiwi, and ended the week 1.23% below the base value. It lost 3.37% since our last market research release on JPY 20 days ago. Significant impact came from the comments by the vice minister of finance Furusawa and BOJ governor Kuroda on Sunday eve/Monday morning. JPY index lost 0.4% in the course of a few hours. It was recovering all the way till the release of the US data on Tuesday. Even BOJ Monetary Policy Meeting Minutes and CSPI releases on late Monday seemingly had no impact on the JPY.
Iran deal (link) which fuelled risk sentiment wasn’t beneficial for the JPY either. Data from the U.S. on Tuesday seems to have had a substantial impact on the yen. Index started trailing lower from then on. U.S. data on Thursday seems to have similar effect as well. JPY index lost 0.3% in those hours. No different was Thursday, index continued to trail lower. Surprisingly, it was unaffected by the Japan’s retail sales data on Wednesday and CPI numbers on Thursday.
As already mentioned the JPY index was one of the worst performers last week. In addition to this, the JPY yen was outperformed by all of it’s major counterparts. Biggest losses were against the European counterparts which varied from 2.07% to 2.52%.
Looking at the graph we can see that Euro index was one of the best performers last week amongst the currency indices. However, it spent most of the time below the base value before the data releases from the US on Tuesday. The data release itself did not have much impact on the Euro, but caused it to inch up higher from there onwards. German Consumer Climate on Wednesday fuelled this rally further. Noticeable step back can be seen at the end of Wednesday when Japanese retail sales data was released. Index recovered these loses on Thursday when numerous data from the Eurozone came out. Although it mostly came out worse than expected, this did not have any lasting effect on the Euro.
Index started to trail lower after S&P lowered the credit rating of the Netherlands. Index was 0.75% up from it’s base value at that point, but lost almost 0.3% till the end of the period closing 0.47% above the base value. Even better than expected Eurozone CPI and Unemployment numbers on Friday did not stop that.
Euro was outperformed only by the British pound and Swedish krona last week. Both were effected by mostly the same events as the Euro, just their magnitude was different. Aussie, kiwi, yen and the loonie once again were the worst performers. Euro booked at least a 0.96% against all of these currencies. Three of the mentioned four are the worst performers, index basis, in the last 130 days and it seems that the trend will remain the same.
US dollar index was a mediocre performer last week—it outperformed 3 and underperformed against 5 indices ending the week 0.02% below the base value. It is worth pointing out that index range was just 0.62%. During the week it did not fall more than 0.25% below and did not rise more that 0.37% above the base value. It is understandable as there was only few events related to the US which had significant impact in the markets. Most of the attention was on other regions and currencies. Period started with quite a lot of data coming out from the US. Better than expected numbers gave initial mood and Eurozone data on Thursday provided small boost as well.
USD index started slowly trailing down on Friday after the downgrade of the Netherlands. Fed chairman’s speech and other data had little impact on the index as it remained around the base value after that.Yen, loonie and aussie indices were the worst performers last week. No surprise that USD managed to book gains against all of the underlying currencies which ranged from 1.28% against yen to 0.45% against aussie. Biggest loss is seen against GBP which received a significant boost from the UK data releases on Wednesday and did not look back afterwards. Losses against all the other currencies, except Swedish krona, did not surpass 0.31%.
Market volatility (Dukascopy Bank Volatility Index) and EUR/USD volatility usually follow the same path. Mostly it was so during this period of analysis as well, but there were a few periods of a mismatch. First one was on Friday. After the Netherlands’ credit rating downgrade market activities were rather depressed despite the incoming data. Real breakthrough took place at the end of the day when EUR/USD started changing hand 1.5 times the usual. Similar activity could be seen in the rest of the market as well. Second similar period could be seen yesterday when the Eurozone PPI had noticeable impact on the markets, but seemingly no effect on the EUR/USD whatsoever. The two volatilities converged closer to the end of the day.
Video version of the report will be available here.
The six-month global economic expectations improved in November, whereas the three-year index decreased, a Dukascopy Bank SA poll showed. The six-month economic sentiment index inched up 0.01 to 0.63. The three-year
economic outlook worsened 0.02 to 0.71.
Respondents did not change their view on the six-month European economic outlook, yet experts became less optimistic about the three-year economic expectations in November. The six-month economic sentiment index stood unchanged at 0.53, and the three-year economic sentiment index retreated 0.05 to 0.62.
The North American six-month economic sentiment index advanced to 0.66 from 0.63 in October. The three-year outlook went up to 0.73, from 0.71 in October.
The Asia-Pacific six-month expectations remained stable at 0.7 level, while the three-year economic outlook fell 0.02 to 0.78.
Figure 4 presents the business cycle and its phases - expansion (real GDP is increasing), peak (real GDP stops increasing and begins decreasing), contraction or recession (real GDP is decreasing), and trough (real GDP stops decreasing and begins increasing).
Respondents are equally divided on the European six-month EDS. Fifteen claim the economy will be in a recession, while another half say the economy will be expanding, yet twenty two expect that the regional economy will gather pace in three years time.
Majority of experts support the view that the North American economy will be expanding both six months and three years from now.
Experts are largely united about the Asia-Pacific 6-month EDS – twenty forecast expansion and four say the economy will reach its peak. Twenty six respondents support the view that the Asia-Pacific economy will expand three years from now.
Swiss franc was the second best performer last week on index basis being outperformed only by the NZD index. In addition to this, it is the second best performer, only lagging behind GBP, in the last 130 trading days. The start of the period was rather gloomy as index was trailing down after the downgrade of the Netherland’s credit rating and hit the period low of 0.56% below the base value on Monday. Swiss SVME PMI and Eurozone Final Manufacturing PMI seems to have provided substantial boost then as it started inching up higher. Tuesday was relatively calm, as Eurozone PPI, despite being worse then expected, had little impact. No obvious effect was felt from the US data as well.
We can see few peaks in value of the CHF index on Wednesday since important Eurozone data was coming out. Despite being slightly worse than anticipated it had no effect on the overall trend of the CHF. The most important events yesterday, and the whole week, arguably were ECB Minimum Bid Rate announcement and ECB Press Conference. Mario Draghi reassured that inflation in the Eurozone will remain below 2% and pledged to intervene if necessary. This gave significant boost to the Euro and to the Swiss franc which ended the period 0.77% above the base value.
As mentioned before, CHF outperformed all of it’s major counterparts lagging behind only against the NZD which benefited from risk sentiment in the end of the last week.
Market (Dukascopy Bank Volatility Index) and USD/CHF volatilities were following the same path last week. We can see substantial trading activities at the end of the day on Friday when market participants priced in the downgrade of Netherlands and other data. Monday had quite a few peaks in volatility. It is pretty safe to assume that the first increase in trading activities took place due to the traders rearranging their portfolios after the weekend. Second two were cause by the Swiss and Eurozone data coming out and Fed Chairman speech as traders were looking for hints on when the tampering will begin. Tuesday was relatively calm as market and USD/CHF volatilities were 1.25 and 1.5 times, respectively, larger than the usual.
Euro (index basis) was one of the best performers last week yielding only to the New Zealand dollar and Swiss franc. Latter, however, is bounded by the 1.20 ceiling therefore always outperforms the Euro at least a tiny bit. Period of analysis for the Euro started in a rather calm manner. It dipped below the base value (0.35%) and spent most of the time there until Wednesday when Eurozone data pushed it back to the base value. All the data before that caused just minor peaks and dips, but had no palpable effect. Thursday was the day when everyone’s eyes was on the Euro—ECB’s bid rate announcement was shrouded with rumours.
Although it remained unchanged during the following press conference Mario Draghi pledged to keep the Eurozone inflation below the 2% for the next two years. This seems to be the highlight of the week as the US data on Friday seemingly had no effect on the Euro index which ended the week 0.6% above the base value.
As mentioned before, the Euro was one of the best performers in the last 5 trading days. Part of the losses against the franc can be easily explained by the 1.20 cap where as kiwi was substantially boosted by the US data on Friday. Smallest gains was registered against Swedish krona which benefitted from the Eurozone PPI numbers on Tuesday. Gains against other currencies were substantial—from 0.87% against the greenback to 1.49% against the yen.
As it becomes usual EUR/USD and the market volatility (measured by the Dukascopy Bank Volatility Index) closely follow each other. First 3 days of the period were relatively calm—both, the market and the EUR/USD, volatilities didn’t increase more than 2 times the usual (long term) level. Eurozone data which is not seen that often and US Trade Balance on Wednesday caused the most hiatus in that period. Highlight of the week, however, was Thursday during the ECB benchmark rate announcement and related press conference. Market activities on average were around 2 times more intensive than usual during the mentioned events, but EUR/USD was changing hands almost 4 times faster.
US dollar index was one of the worst performers in the analysis period which started with a mild boost of 0.25% from the US Trade Balance numbers. However, it did not manage to keep up for long as Non-manufacturing PMI numbers pushed the index back to the base value. No major changes were seen after that until Thursday. US numbers came out better than expected, but it seems that ECB had stronger impact as index lost 0.2% of value on Bid Rate announcement and following press conference. Friday’s data, coming mostly as expected, seems to have eroded some of the bullish sentiment as well— index once again lost 0.2%.
Despite events taking places in both sides of the ocean Monday, effectively, hand no effect on the dollar index. ECONFIN meetings and ECB president Draghi seems to have undermined the dollar index as well. It lost 0.28% before ending the period 0.65% below the base value.
USD outperformed only Swedish krona and Japanese yen this trading period. However, gains were only 0.32% and 0.2% respectively. Smallest losses were registered against the loonie and cable, 0.35% and 0.38% respectively. Losses against the other currencies ranged from 0.74% against the aussie to 1.89% against the Swiss franc. It is clear that latter and the Euro benefited from the ECB rate announcement, were as kiwi got a boost from a change in the risk sentiment.
Market volatility (Dukascopy Bank Volatility Index) and EUR/USD volatility continued to follow primarily the same path. Eurozone and US data boosted both, in the market and the EU/USD, volatilities up to almost 2 times the normal values. Thursday definitely was the highlight of the analysis period as ECB rate announcement and following press conference made EUR/USD to change hands almost 4 times faster than the usual. Market volatility peaked above the index value of 2 as well. Slightly lesser effects can be seen on Friday US data boosted the market and the EUR/USD above the index value of two. It was mainly due to the fact that numbers came out as expected and did not show clear indications about Fed’s tampering schedule.
GBP index was the worst performer amongst the best performing indices last week. Aussie, yen and Swedish krone indices ended the week at least 1% below the base value. Besides these 3 the GBP index in addition outperformed only the USD index. However the difference was just 0.03%. Knowing this, 0.39% close above the base value doesn’t look that promising for the GBP index. On Friday we saw a shift in risk sentiment which provided significant boost for some pair’s, like NZD, but GBP index climbed only to 0.22% above the base value, but stumbled below it soon after that. Index started inching higher on Monday and climbed until reaching 0.58% above the base value on Tuesday.
BOE Governor speech on Monday arguably had the most impact on that. However, worse than expected UK’S Trade Balance data sent the HBP index spiralling down. It managed to stabilise only when MPC Member Weale said that BOE forward guidance helped to lower uncertainty in the short-term and provide additional boost to the economy. ECB presidents speech about upcoming stress tests on the Eurozone banks boosted the confidence in the European currencies. In addition to that pound was able to benefit from the US numbers as well.
All in all we could say that GBP was an average grade (with minus) performer last week without a clear trend succumbing and gaining from various market events.
Video version of the report will be available here.
Participants of the Dukascopy Bank SA December poll share a positive view on the global economy and its future development as both the six-month and three-year economic sentiment indexes improved to 0.66, which is a highest reading since the records began, and 0.73, respectively.
Experts’ six-month outlook on the European economic conditions did not change dramatically and gained 0.01 from the November reading of 0.53, while the three-year expectations advanced 0.03 to 0.65.
The North American short and long term sentiment indexes both posted the biggest increase among the three regions in December. The six-month outlook gained 0.05 to 0.71 and the three-year forecast rallied 0.04 to 0.77.
Respondents became more optimistic regarding the Asia-Pacific economy six months from now with sentiment index reaching 0.72 compared to 0.70 prior month, while the forecasts three years from now stood unchanged at 0.78.
Figure 9 presents a discrepancy in views on the economic outlook among the local and foreign experts. December poll results reveal that respondents from North America are less optimistic about the local economic outlook compared to their foreign colleagues.
Europe: Local experts have more optimism about the European six-month economic prospects compared to their foreign colleagues, while the discrepancy in the opinions between the groups reaches positive 0.07 for the three-year economic outlook.
North America: Respondents from North America grant less confidence to the six-month and three-year economic outlooks than the foreign poll participants (0.68 vs. 0.73 and 0.70 vs. 0.80, respectively).
Asia-Pacific: Local respondents’ projections about the Asia-Pacific six-month economic outlook are stronger than those of the foreign poll participants. The discrepancy in views reaches the value of 0.15 for the three-year economic sentiment index.
The passing year was undeniably tumultuous, as for a long time it was not clear whether the global economy started 2013 on the right footing and the recovery will carry on unhindered. There were quite a few reasons to stay pessimistic and risk averse; most of them revolved around the U.S. economy – government shutdown, debt ceiling, sequester, Detroit’s bankruptcy, lawsuits against big banks and many more. All that negatively affected confidence in the world’s largest economy and therefore noticeably strained global financial markets.
Nevertheless, despite all of these malevolent factors persisting throughout the year, the U.S. economy proved to be resilient and surprised on the upside in the end. While the first quarter growth stood at a modest 1.1%, the pace of expansion accelerated to 2.5% in Q2 and finally revved up to 4.1% in Q3, making all doubts with respect to the ability of the United States to weather the headwinds invalid. As a result, confidence and economic activity are set to continue picking up.
Apart from the actual positive macroeconomic readings, a broadly shared conviction that the world is now better prepared to venture into the future also served as a catalyst for the overall improvement. Political and economic progress was assured by a new U.S. budget deal on which both parties agreed upon, thus eliminating the possibility that the government shutdown will take place again somewhere in the future.
Still, we wish to warn it is not time for glee, and especially it is not time for complacency. The global economy continues to operate below the capacity. Job market may be improving, albeit slowly, which in turn translates into weak consumer spending. Therefore we call not to relax just yet and continue working hard for a better future, which is certain to come! Happy New Year and may nothing but happiness come through your door!
USD currency index was one of the worst performers in the last 5 trading days which managed to outperform only the CAD index. Wednesday and Thursday were relatively calm. None of the events or data releases managed to had any major impact as index remained +/- 0.2% around the base value. Friday’s Non-farm Employment Change, which came out substantially worse than expected, 74 thousand instead of estimated 196 thousand, gave the tone for the rest of the period. It eroded 0.4% of the index value sending it below the base value from where it did not recover. Monday’s Federal Budget balance came out better than expected, but index was continuing to lose value.
It ended that day 0.3% below the opening value. Tuesday brought in some positivity as strongly better than expected Core Retail Sales from the US got the ball rolling. Remarks from FOMC Members Plosser and Fisher seemingly helped the USD index as well. It gained 0.15% during the day and ended the period 0.45%below the base value.
USD was outperformed by most of it’s counterparts. It posted a 1.55% gain against the CAD, however it was the smallest gain in comparison to the other major currencies. USD losses ranged from 0.31% against GBP to 1.3% against SEK.
Euro index was one of the worst performing currency indices last week. It surpassed only the aussie index which ended the week 2.1% below the base (opening) value, whereas euro index loss was 0.5%. Not that much above was the Swiss franc index which close 0.48% below the base value. Italian Industrial Production data on Monday was a bit disappointing which caused the index to close 0.3% below the base value. We saw some recovery on Tuesday as Eurozone Industrial production data brought back the optimism about the Euro. Wednesday however was marked with worse than expected Eurozone trade Balance data which caused index to lose 0.2%.
Euro index trailed slightly higher on Thursday which seemed to be due to the combination of the data releases from the Japan and UK. Eurozone CPI data, however, made it to loose all of it’s gains and end the day slightly below the base value. Friday showed the biggest changes as positive numbers from UK’s Retail Sales seems to have caused a Euro sell off. It’s index it lost 0.45% of the value during the Friday and ended the week 0.5% below the opening value.
Euro was outperformed by almost all of the major currencies. Aussies underperformance allowed Euro to book 1.43% against it; 0.01% loss against Swiss franc is negligible due to the 1.2 exchange rate cap. Loses, however, were substantial—from 0.58% against GBP to 1.21% against Swedish kroona.
USD index was one of best performing currency index last week and was surpassed only by the GBP index. It showed clear bullish bias from the beginning of the period. Better than expected Core PPI and Manufacturing Index data from the US caused USD index end the Wednesday 0.48% above the base (opening) value. Index continued to inch up higher on Thursday which was heavy with US data. Most of the numbers came out as expected which directed some of the capital flows to other currencies causing USD index to end the day where it started—0.45% above the base value. Friday’s data releases helped USD index to climb further up. It gained 0.37% during the day and ended it 0.82% above the base value.
Monday was a bank holiday in the US due to which, as we can see from the graph, most of the indices showed very little change during the day (kiwi index was effected by the New Zealand’s CPI data). Tuesday showed very few data releases at all, none from the US. However, as most of the numbers came out worse than expected, it must have boosted the trust in USD. However, Canadian data later in the day dragged USD index down. It ended the period 0.51% above the base value.
USD posted gains against most of it’s major counterparts which varied from 0.11% and 0.16% against yen and loonie respectively, till 1.2% against the aussie. The only, 0.31%, loss is against GBP which benefited heavily from Retail Sales data on Friday.
Due to the Bank Holidays in the US on Monday we saw rather little action in the markets in the last week. It is very well illustrated by the fact that market (Dukascopy Bank Volatility Index) and all of the currency pairs demonstrated elevated volatility in less than 30% of the time. In addition to this, average volatility of the market and all of the individual currency pairs was noticeably below the long term values.
