Forex: Friday’s review

The dollar fell to a one-week low against the euro, as the report showed that the level rose more than expected. Labor Department reported that the consumer price index rose 0.7 percent in February after he remained at a minimum level in the previous three months. Economists had expected the consumer price index increased by 0.4 percent. The inflation rate in the measurement of the maximum monthly from June 2009. Meanwhile, the core consumer price index, which excludes food and energy, rose 0.2 percent in February after increasing 0.3 percent in January. Increase in price corresponds to the estimates of economists. The rise in prices has occurred as a consequence of a sharp rise in energy prices, which have jumped in February to 5.4%, while food prices rose only 0.1%.

The U.S. currency is sent to its first weekly decline against the Euro currency since early February, as many participants are waiting for the meeting of the Open Market Committee, which will take place week. It is assumed that this meeting may be revised terms of asset-purchase program, known as quantitative easing, or QE.

The pound rose sharply against the dollar in the first half of trading after the Bank of England Governor Mervyn King said that the politicians are not trying to weaken the currency. Pound close to the maximum level against the dollar this month, while the King, in an interview with ITV News said that "the market determine the exchange rate, and not of us." Once in the past couple quarters of the Bank of England King gave a verbal intervention against the high rate of the national currency, now he changed the tone of his statements and "finds comfort current levels by the pound." But in spite of this strengthening, the pound rose sharply in the second half of the session, helped by weak U.S. data. Note that in March consumer sentiment index, calculated by Reuters and the University of Michigan, dropped to a mark of 71.8 was significantly lower than the forecast 78.2 and February's 77.6 result. Published data have disappointed the markets, especially the expectations of Michigan preliminary index un-ta/Reuters, which in March fell to 61.7 against 70.2 in February. At the same time, a preliminary index of current conditions un-ta/Reuters Michigan in March fell to 87.5 against 89.0 in February. Index of 5-year inflation expectations at Michigan un-ta/Reuters in March rose by 2.9%, while the 12-month inflation expectations un-ta/Reuters Michigan in March added 3.3%.