Forex: Thursday’s review

Yesterday rate of the euro fell sharply against the dollar after European Central Bank President Mario Draghi said that the economic weakness to continue in the next year, and therefore, the central bank may resort to lower interest rates.

Also, data released showed that the gross domestic product in the euro zone fell 0.1% in the third quarter, compared with a fall of 0.2% in the previous three months. When it fell by 0.2 percent.

The single currency fell from nearly seven-month high against the yen after the European Central Bank has lowered its growth forecasts and said it sees "risks" for the region. Draghi said that the ECB predicts economy will shrink by 0.5% this year, slightly more than the 0.4% reduction which was originally reported in September. Meanwhile, the ECB cut its outlook for 2013, stating that the economy could shrink by 0.3% (initially show an increase of 0.5%), while in 2014 the growth of 1%. In addition, the ECB also lowered its inflation forecast for next year to 1.6% from 1.9%.

British pound during the first half of the day was growing against the dollar amid data showing that Britain's trade deficit widened more than expected, driven by a sharp fall in exports to countries outside the EU, and also due to the increase of imports from USA. The data showed that the deficit rose to Stg9.539 billion from - Stg8.439 billion the previous month, while economists had expected that figure will-Stg8.6 billion Also, the Bank of England decided to leave interest rates unchanged at 0 , 5% and the amount of the program of asset purchases at around 375 billion pounds.

But, despite this, the currency could not hold its positions, and dramatically collapsed, which was due to lower growth forecast by the ECB.

The yen strengthened against most major currencies as investors sought safer assets. The New Zealand dollar rose to a two-month high against the dollar after the Reserve Bank of the country said that the growth is likely to accelerate. Also, the RBNZ left the interest rate unchanged at 2.5%.