The announcement of the Federal Open Market Committee (FOMC) of its preference to see further labour market improvement before tapering of stimulus measures begins weighed down upon the US greenback, which lost considerable ground in the middle of the previous week, in an overall extremely volatile week in the currency market, a specialized report indicated, Monday.
The weekly report of the National Bank of Kuwait (NBK) said "initial reaction on Wednesday night saw treasuries and equities rise," in reference to the FOMC statements. "These moves retraced with treasuries ending near their lows and stock indices little changed. The main move was however, in currencies, as the USD fell sharply versus the other majors with gains in the EUR, JPY, and GBP." "On the foreign exchange side, currencies closed the week with a recovering US Dollar after its weakness prevailed during the middle of the week. After dropping on Wednesday night by 2.76%, from a high 84.75, the Dollar index recouped some of the losses to close the week around the 83.00 level." The report further points out that, "Gold prices jumped to almost USD 1,300.
00 as Fed Chairman Bernanke's dovish monetary policy comments triggered a buying spree among investors. Gold prices closed at USD 1,285.00 on Friday.
"The continuous volatile situation in Egypt continues to put upward pressures on Oil prices, along with the US inventory coming much worse than expected. Oil prices reached a high of 107.45 to end the week at 105.95." Moving on to jobless data, NBK reported that, "Initial jobless claims for the week of July 6 increased +16k (16,000 claims) to 360k, after the prior week was revised up +1k to 344k." When it came to the Euro Zone, the report indicated the region was suffering imbalance, with weak economic growth. This comes after both the Bank of England and the European Central Bank kept to current interest rates last week.