Forex

The UK economy returned to recession in the last quarter of 2012

Asian and European trading sessions:

Euro: The EUR / USD pair traded in the range of $ 1.3449-70 during the Asian session. The euro moved slightly down against the U.S. dollar after the published today data which recorded decline in volume of the issued credits for the private sector and, in particular, for corporate one. In details, the volume of credits for the private sector fell in December by 0.7 % after declining by 0.8 % in November compared with the same period of the previous year. The volume of lending for non-financial institutions in December fell by 51 billion euros (68.7 billion U.S. dollars) after declining by 7 billion euros in November compared with the same period of the previous month. In addition, the lending to households also slowed down, decreasing by 2 billion of euro. The EUR / USD pair fell to a new low of $ 1.3424 during the European session.

U.S. Dollar: The dollar rose against its rivals and the dollar index grew to the level of 79.97 ahead of today's publication of macroeconomic data in the U.S. As it was expected, the orders for durable goods would have grown in December and shown the largest increase since September. Investors also await the results of a two-day meeting of the Federal Open Market Committee of the Federal Reserve the beginning of which scheduled for tomorrow.

British Pound: The British pound was down against its counterparts against the fears that the next governor of the Bank of England may introduce new stimulations for weak economic growth in the UK, allowing a higher level of inflation in the country. The market participants were selling the pound throughout all day as a consequence of Friday’s release of data on the reduction of the UK 's GDP in the last quarter of 2012 which was associated with the risk that the UK economy in the third since 2008 would fall into recession. The GBP / USD pair fell to a new low of $ 1.5702 during the European session.

Japanese Yen: The USD / JPY pair hit the new high at Y91.25 during the Asian trading session. However, it could not keep this level and fell to a low of Y90.56 during the European session. The technical situation shows an oversold of the currency against most of the 16 most traded currencies and many investors suggest that the currency will stop it’s longest series of 11 weeks decline.

American trading session:

British Pound: The pound fell amid the publication of data came from Hometrack, which showed that house prices in England and Wales remained unchanged in December, after declining in the previous six months. Also, the pressure on the currency was provided by the earlier statement, which became known that the UK economy returned to recession in the last quarter of 2012. The GBP / USD pair fell to a new low of $ 1.5674 during the European session.

U.S. Dollar: The data presented by the report of the Ministry of Commerce supported the currency. The results showed that the orders for durable goods in the U.S. rose in December by 4.6 % after increasing 0.7% in the previous month. The forecast of many experts was at increase of only 2%.

Gold: The February futures price of gold fell today to 1651.40 dollars per ounce as some traders reduced the number of their positions in anticipation of the results of the Fed meeting scheduled for this week. On COMEX the asset’s prices tried to rebound and succeeded moving to the level of $1659 per ounce.

Oil: The price of February futures the duration of which expired today, grew on positive results of orders for durable goods in the U.S. that added optimism that the economic recovery will boost demand for the oil. The cost of WTI type of oil rose to 96.52 dollars on NYMEX.