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Currency market weekly review (April 28 - May 02, 2014)

May 5, 2014, Monday, 12:42 GMT | 07:42 EST | 16:12 IST | 18:42 SGT
Contributed by Forex-Metal

Euro: +0.2%  On the dynamics of a single currency for the last five trading sessions, the greatest impact had a publication on the inflation indicators for Germany and the euro area, as well as the German labor market data . Earlier this week, market participants' attention was focused on the European inflation reports in the hope that they can afford better determine the prospects of monetary policy of the European Central Bank (ECB). The first, on April 29 published data on the consumer price index in Germany, which were slightly weaker average forecasts ( in MoM index fell 0.2 %, which was lower than expected -0.1 %, an annualized rate came in at the average forecast - 1.3 %). Euro reacted by rapid fall on this reduction in data. German Statistical Office report pointed to a marked decrease in the number of unemployed in Germany in April, signaling that Europe's largest economy will continue to be the locomotive of the region's recovery.

US Dollar: At the end of the week all market participants' attention was focused on data from the U.S. labor market, which were unexpectedly strong. Stronger -than-expected employment data, provoked a temporary strengthening of the dollar as the increased chances of a rapid folding Fed quantitative easing program (QE).

However, concerns about the escalating growth of the Russian- Ukrainian conflict in connection with the Kiev operation in the eastern regions of the country, at the end of the week provoked growth in demand for safe-haven assets, which allowed the dollar to recover some of the losses.

British Pound: +0.4% The British pound during the last week several times updated four high against the U.S. dollar, even in spite of the fact that the UK GDP data, which were published on April 29 were weaker than expected. Negative factor for sterling had data on the index of activity in the construction sector of the UK economy, which indicated a greater -than-expected slowdown in the expansion in April. The GBP / USD pair in Thursday, May 1 reached a four-year high of $ 1.6922.

Japanese Yen: -0.1% The Yen positions have changed slightly against other major currencies. Results of the meeting of the Japanese central bank, which became known on Wednesday, had no significant impact on the yen’s positions. The Bank of Japan has confirmed the policy of increasing the monetary base at 60-70 trillion yen per year, thus refraining from new incentives to increase the economy. At the end of the week the yen strengthened sharply against the background of increasing demand for currency with the status of safe heaven due to the worsening situation in Ukraine. Investors feared a possible escalation of the Ukrainian- Russian conflict in connection with Kiev in the eastern regions of the country antiterrorist operation.