• Home ::
• Fundamental ::
• Market View ::
• Currency and Stock Markets Weekly Outlook

• Send
• Print
• Add To
• Rss

Currency and Stock Markets Weekly Outlook

bccbadee-59fb-46aa-94d5-5b75fcf5dadf

0

0

Trichet expressed his fear

Fri, Aug 8 2008, 13:57 GMT
by Jakub Paturalski

X-Trade Brokers, XTB

Last week in spite of lots of significant fundamental data, the market was totally dominated by the ECB’s decision with regard to interest rates in the Euro Zone and the press conference of the ECB’s chairman - Jean-Claude Trichet.

Interest rates remained unchanged at the level of 4.25%, but during the conference Trichet expressed his fear about the Euro Zone’s inflation and especially low economical growth. Investors did expect some information with regard to an eventual hike on rates in the near future, but to no avail.

This seemed enough for the EURUSD market to plummet to the boarders of 1.51 despite the worse than expected readings from the US labor market (forecast: 420K unemployment claims, actual value 455K). What has to be added is that the strengthening of the US currency was aided by better than expected results regarding US Pending Home Sales (forecast -1%, actual value +5.3%).

The appreciation of the US Dollar did cause a significant corrective movement on commodities markets, above all oil which currently stands at 115 $ and gold standing at 860 $.

What has to be also noted is that the Federal Reserve decided to keep rates unchanged at the level of 2%. This event however, had no effect on the EURUSD market.

As to the Polish market, there is increasing fear of the probable rise of interest rates. Economy Minister Waldemar Pawlak said that strong zloty is threat for Polish economy and that the Ministry of Finance should be engaged in finding a solution to the problem. It has to be however stated that the Polish currency lost on value against all major currencies and currently the USDPLN and EURPLN stand at 2.17 and 3.27.

Published on  Fri, Aug 8 2008, 13:58 GMT