FOREX weekly review (10.06 – 14.06.2013)

The U.S. dollar fell against the Japanese yen on Friday, but fought to stick around the ¥94 threshold. For the week, the dollar was down about 2.8% against the yen, on track for a fourth straight week of declines.

Thursday evening The Wall Street Journal reported that Fed Chairman Ben Bernanke next week will try to calm fears that any move to reduce the pace of its bond buying won’t mean the Fed is close to ending the program. Bernanke is scheduled to hold a press conference on Wednesday.

May retail sales rose at the fastest rate in three months, jumping a seasonally adjusted 0.6%. The increase was fueled by auto sales, which masked a fall in sales for electronics, clothes and restaurants, among others. Retail sales were expected to rise 0.5% in May after a small 0.1% uptick in April, according to economists.

Weekly jobless claims fell by 12,000 to 334,000 for the week ended June 8 and the four-week average of new claims, which is less volatile, fell by 7,250 to 345,250. Economists had expected a weekly figure of 350,000.

Germany’s top court continues its two-day hearing to address the European Central Bank’s Outright Monetary Transactions program and the European Stability Mechanism. ECB’s Asmussen: said the OMT aims only to curb unjustified peaks in interest rates;

There are no dangers of inflation as a result of OMT, purchases will be sterilized;

Positive effects are already visible;

OMT is not government financing;

Bond buys on secondary market.

Also he noted that ECB is more сonservative than U.S. Fed.

The slowdown in China’s growth may extend into the third quarter, the China Securities Journal said today. Uncertainties over investment growth will increase as urban development may be slower than expected, according to the newspaper.

EURO:

The euro recovered late Thursday.

Earlier rate was under pressure after the the World Bank cut its growth forecast for the global economy this year to 2.2%, from a January prediction of 2.4%, and slower than last year’s 2.3%.

Investors also focused on euro-zone industrial-production data, which showed a 0.4% improvement in April, beating expectations.

But the rise was cappet by Greece worries after the two biggest labor unions called a 24-hour general strike starting on Thursday in protest over the government’s shutdown of its state broadcaster, the Hellenic Broadcasting Corporation.

POUND:

The British pound rose for a second day versus the euro and US dollar, reaching the strongest level in more than three weeks, after a report showed U.K. jobless claims fell more than economists forecast in May.

The jobless rate in the UK was expected to stay put at 7.8% and it did so, while the more focused bit of data, the claimant change fell from the previous numbers of -11.8k to -8.6k against a consensus of -5.0k, which is over all bullish for the pound given expectation could be for a higher consumer spending count in the long run benefiting economic growth.

The BOE’s Fisher indicating that the economic recovery may take longer than anticipated.

YEN:

The yen rose Thursday as data showing Japanese investors continued to sell foreign debt and equities outweighed stronger-than-expected U.S. retail sales and jobless claims.

Data from the Ministry of Finance showed Japanese investors sold a net ¥386.9 billion ($408.8 billion) of overseas debt and a net ¥221.8 billion of foreign stocks in the prior week. The numbers extend a trend from last week, when Japanese investors sold another ¥1.17 trillion worth of foreign bonds, the largest amount since April 2012.

The highlight of this evening is the minutes of the May 21-22 Bank of Japan meeting.

At this week's decision the BOJ didn't opt to extend the loans and hints about why might be in the prior meeting. The minutes will be released at 23:50 GMT.

At 07:10 GMT the Japanese cabinet office will release its monthly economic report and is expected to upgrade its economic encasement for the third month in a row.

COMMODITY CURRENCIES

AUSSIE: The Australian dollar rose.

The Australian Bureau of Statistics said employment rose by 1,100 jobs in May, to nearly 11.7 million. Economists had expected, on average, a loss of 10,000 jobs last month.

The unemployment rate on a seasonally adjusted basis remained at 5.5%, while economists were looking for a rise to 5.6%.

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