EUR

The euro depreciated vis-à-vis the U.S. dollar last week as the single currency tested bids around the $1.2385 level and was capped around the $1.2925 level. The pair lost about 115 pips last week. The U.S. Treasury announced plans to abandon its US$ 700 billion purchase of toxic assets and will instead seek to capitalize banks. Fed boss Bernanke said central bankers “stand ready to take additional steps should conditions warrant.”


Germany ’s “Wise Men” are gloomy on their 2009 economic forecast and foresee a recession. The ECB’s monthly bulletin reported heightened economic uncertainty. Germany entered a technical recession and the government pledged €50 billion in new spending. France has likely averted a technical recession so far. ECB’s Ordonez, Bini Smaghi, Orphanides, and Stark said rates could come down further.



Data released in the U.S. last week saw pending home sales off 4.6%; weekly initial jobless claims were up 32,000 to 516,000; continuing jobless claims reached 3.9 million; imports fell by a record 5.6% in September; October retail sales were off 2.8%; and the mid-November University of Michigan consumer sentiment improved to 57.9.



Data released in the eurozone last week saw French October CPI off 0.1% m/m; German Q3 GDP fell 0.5% q/q; the November ZEW economic sentiment indicator rose to -53; the November ZEW economic sentiment indicator rose to -53; French September industrial output was off 0.5% m/m; and German October CPI was off 0.2% m/m and up 2.4% y/y.





YEN

The yen appreciated vis-à-vis the U.S. dollar last week as the greenback tested bids around the ¥94.45 level and was capped around the ¥99.45 level. The pair lost about 115 pips last week. The Nikkei 225 stock index gained 2.72% on Friday to close at ¥8,462.39. Finance chief Nakagawa verbally intervened against the yen and BoJ’s Nakamura doesn’t see the need to cut rates again now. Aso proposed some initiatives ahead of the G20 including IMF funding. Finance chief Nakagawa verbally intervened against the yen’s strength.



Data released in Japan last week saw September industrial orders up +1.1% m/m; October wholesale prices were up 4.8% y/y; October consumer confidence weakened to 29.4; October service sector sentiment fell to 22.6; October outstanding bank loans were up 2.2% y/y; the October M3 money supply was up 0.6% y/y; the September current account surplus was off 48.8% y/y; October bankruptcies were up 13.4% y/y; October service sector printed at 22.6; October outstanding bank loans were up 2.2% y/y; the September current account surplus was off 48.8% y/y; core private sector machinery orders were off 10.4% q/q; September industrial orders were up 1.1% m/m; and October wholesale prices were up 4.8% y/y.



In Chinese news, PBoC boss Zhou said the central bank’s monetary policy has shifted to “moderately easy” from “prudent and flexible.” China announced a major US$ 586 billion economic stimulus package.



Data released in China saw October factory output growth decelerate to +8.2%; the October trade surplus reached a record US$ 35.24 billion; October CPI fell to +4.0% y/y; October retail sales were up 22.0% y/y; October PPI was up 6.6% y/y; and October fixed asset investment was up 27.2% y/y.



GBP

The British pound depreciated vis-à-vis the U.S. dollar last week as cable tested bids around the US$ 1.4560 level and was capped around the $1.5880 figure. The pair lost about 900 pips last week. BoE boss King said the central bank is prepared to cut rates again if necessary. The BoE’s quarterly inflation forecast contained the largest-ever cut in inflation forecasts, now eyeing inflation “well below” 2% by 2010. Chancellor Darling justified higher borrowing on account of the recession. Sentance said recent rate cuts will take time to reach the real economy. PM Brown suggested taxes may be reduced to help stimulate the economy.



Data released in the U.K. last week saw BRC October retail sales off 0.1% y/y; the September global goods trade deficit narrowed to ₤7.5 billion; October home sales reached a 30-year low; and October factory orders were off a record 5.6%.





CHF

The Swiss franc depreciated vis-à-vis the U.S. dollar last week as the greenback tested offers around the CHF 1.2000 figure and was supported around the CHF 1.1710 level. The pair gained about 165 pips last week. The Swiss government announced an CHF 890 million economic stimulus.



Data released in Switzerland last week saw the November ZEW expectations index improve to -88.5; October producer and import prices were off 0.6% m/m and up 2.9% y/y; and October consumer confidence declined to -27.





AUD

The Australian dollar depreciated vis-à-vis the U.S. dollar last week as the Aussie tested bids around the US$ 0.6340 level and was capped around the US$ 0.6980 level. The pair lost about 260 pips last week. RBA slashed its GDP growth forecasts through 2010.




Data released in Australia last week saw November consumer confidence improve marginally; Q3 wages were up 0.9% q/q; and October business conditions worsened to -11.