Currency and Stock Markets Weekly Outlook

Weekly Currency Brief

Fri, May 16 2008, 15:30 GMT
by Adam Narczewski

X-Trade Brokers, XTB


Currency markets are pretty volatile recently and it was no different this past week. These big swings were caused by the inflation reports published in the United States, the Euro zone, the UK and Poland.

In the Euro zone CPI inflation stayed unchanged at 3.3% (on a yearly basis), which is way above the 2.0% limit set by the European Central Bank (ECB). High inflation is a problem since the European economy is slowing down and an interest rate cut seems reasonable. Right now, the chances for such move by the ECB declined causing the Euro to strengthen. At the same time, CPI inflation in the U.S declined to 0.2% on a monthly basis, which was lower than forecasted. During the course of the week, the EUR/USD advanced from $1.5390 to $1.5485 reaching even $1.5560 on Monday. It seems that this is just a corrective movement and soon the American dollar will keep strengthening.

As usual, investors experienced big swings on the Złoty market. This past week the Polish currency reached new records against the Euro at zł.3.3745 and the American dollar at zł.2.1665 on Tuesday. The Złoty started losing value on Wednesday when we learned that CPI inflation in Poland dropped to 4.0% on a yearly basis against the forecasted 4.1%. Such reading lowers the chances for an interest rate hike by the Polish Monetary Policy Council in May or even June. The Złoty ended the week at zł.3.3855 against the Euro and at zł.2.1845 against the dollar.

Published on  Fri, May 16 2008, 15:32 GMT

Archive

X-Trade Brokers Dom Maklerski SA  | Robert.kosowski@xtb.pl; 00-876 Warszawa
http://www.xtb.com/ | Robert.kosowski@xtb.pl

Legal disclaimer and risk disclosure

X-Trade Brokers Dom Maklerski S.A. does not take responsibility for investment decisions made under the influence of the information published on this website. None of the published information can be treated as a recommendation, disposition, promise, or guarantee that the investor will achieve a profit or will minimize risk using the information published on this website. Transactions including investment instruments, especially derivatives using leverage, are in its nature speculative and can provide both profits and losses that can exceed the initial deposit engaged by the investor.

Interested in forex trading? forex brokerage firms!


FOREX.com
Contact the broker/FDM
Open a demo account
GFT
Contact the broker/FDM
Open a demo account
Forex Club Financial Company
Contact the broker/FDM
Open a demo account		Crown Forex SA
Contact the broker/FDM
Open a demo account		Tradeview Forex a Division of Rosenthal Collins Group, LLC
Contact the broker/FDM
Open a demo account

FXstreet.com will give you a 3 months membership as soon as minimum rebates have been generated (€150 for private trader/ €300 for corporate trader)

[Read Premium full description]


Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer.

Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management.

Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

©2008 "FXstreet.com. The Forex Market" All Rights Reserved.