Currency market. Weekly review (20.01 – 24.01.2014)

The yen and the Swiss franc rallied as a selloff in emerging-market currencies deepened, stoking demand for haven assets.

The dollar was underpinned by speculation the Federal Reserve will continue to scale back stimulus.

The dollar rose against most of it major peers amid speculation the Federal Reserve will decide to reduce stimulus at a meeting next week even after data showing signs that economic growth is slowing.

The pound fell sharply after BoE governor Carney’s commens. He said that sterling appreciation will hamper export growth. He noted tightening will be only gradual and MPC will look at range of options to update guidance in February QIR.

EURO

In the absence of major economic indicators scheduled for today, focus now turns to central bankers' speeches at the World Economic Forum, including the ECB President Draghi.

POUND

The pair dropped afer Carney’s speech and stays atsession minimums.

Data released showed, the UK BBA Mortgage Approvals rose to 46.5K in December, following 45.4K registered the previous month. Analysts projected an increase to 47.2K.

YEN

The yen closed the week higher as increased scrutiny of credit risks in China’s coal-mining industry supported demand for Japanese assets as a haven.

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