Forex: Wednesday’s review

The euro rose against most of the 16 most traded currencies on speculation that European finance ministers are close to finalizing a bailout package for Greece.

The yen fell to a six-month low against the euro after the volume of Japanese exports recorded a fifth monthly fall, undermining demand for assets in the country. According to data from the Ministry of Finance, the level of exports fell by 6.5% in October, compared with the previous year, resulting in a trade deficit amounted to 549 billion yen. Note that many analysts had expected a deficit of 360 billion yen.

The single currency rose to its highest level in almost two weeks against the dollar after falling earlier in deficiency of Ministers to complete the transaction on the Greek question. But later the currency regained its losses as the finance ministers said that the next meeting to discuss the aid package for Greece will be held on November 26.

At the same time, German Chancellor Angela Merkel told lawmakers this morning that there is a chance for a deal on the Greek question at a meeting next week.

Note that the dollar index rose this morning after Federal Reserve Chairman Ben Bernanke said yesterday that the U.S. economy is at risk of falling into a recession, if lawmakers can not escape the so-called "financial cliff", stimulating demand for safe U.S. currency.

The pound rose to its highest level in a week against the euro after European finance ministers failed to agree on debt reduction for Greece and, in light of the fact that the policy of the Bank of England signaled that it will not cut interest rates.

Sterling captures fourth session rise against the dollar, as the Bank of England minutes showed that policymakers voted (8 in favor, 1 against), to leave a program of quantitative easing this month at the same level. Most politicians have said that the uncertainty among consumers and companies could adversely affect the economy.

Also published data showed that the UK's budget deficit widened unexpectedly in October, and was 8.6 billion pounds, compared with 5.9 billion pounds a year earlier.