Forex: Weekly review

On Monday the yen and the dollar strengthened against most of their major counterparts as concern that unrest in the Middle East will spread boosted demand for safer assets.Japan’s currency rose from a three-month low against the euro as stocks fell in Europe and Asia. Libyan leader Muammar Qaddafi’s son Saif said the country may have a civil war.
The euro dropped after German Chancellor Angela Merkel’s Christian Democratic Union suffered an election defeat in the country’s richest state, fuelling concern that European Union attempts to deal with the sovereign debt crisis will be derailed.
On Tuesday the Swiss franc rose against all of its 16 most-traded counterparts as violence in Libya boosted demand for the currency as a refuge.
The euro pared its drop versus the dollar after Yves Mersch, a European Central Bank council member, said the ECB may toughen its stance on inflation as soon as next week.
On Wednesday the euro climbed to an almost three-week high versus the greenback.
The pound gained versus the dollar as minutes of the Bank of England’s Feb. 10 meeting showed an additional policy maker backed an increase in rates.
On Thursday the Swiss franc climbed to a record against the dollar and the yen strengthened to an almost three- week high as the uprising in Libya drove oil to a 29-month high, spurring demand for the safest assets.
On Friday the yen gained against the dollar for an eighth day, the longest winning streak this year, after data showed the U.S. economy grew more slowly than first estimated in the fourth quarter.
U.S. gross domestic product expanded in the fourth quarter at a 2.8% annual pace, compared with an earlier estimate of 3.2%, Commerce Department figures showed today in Washington. The forecast in a survey of economists was for a 3.3% increase. GDP grew 2.6% in the third quarter. The franc retreated from a record high versus the greenback and the Australian and New Zealand dollars strengthened against most major peers as investors sought higher-yielding assets such as equities. New Zealand’s dollar also rose after Standard & Poor’s said the earthquake in Christchurch would have no immediate effect on the nation’s credit rating.
The dollar pared its loss against the yen after U.S. consumer confidence rose more than forecast this month, according to the Thomson Reuters/University of Michigan sentiment index, increasing to 77.5 from 74.2 last month.