Forex: Wednesday’s review

The euro fell against most major currencies after a published report showed that the unemployment rate in Portugal rose in the fourth quarter to 16.9%, compared with 15.8% in the third quarter, the highest value since the creation of the euro area. Recall that in the fourth quarter of 2011 the unemployment rate was 14%. The data also showed that the number of unemployed in the country for the year rose by 19.7% per year to 923 200. Meanwhile, the number of employed persons decreased by 4.3% to 4.53 million.

The yen traded little changed against the dollar and the euro after sharp movements in the previous session. It is believed that investors cut bearish positions in the yen after an official statement from the Group of Seven countries in which concern was expressed about the excessive movements in the currency of Japan. G7 official representative said that the statement of the group was to signal the concerns about excessive depreciation of the yen. However, economists point out that, in general, no words G7 will not change the basic predictions for the Japanese currency market, and no one expects that the yen could go back to the previous range against the dollar at the 80th figure. Investors are also likely to show caution before the results of the meeting of the Bank of Japan, which ends on Thursday, although many expect that the bank will refrain from any further until the mitigation measures.

The pound fell after the Bank of England said risks to the recovery of the UK economy have been weighted to the downside. The British pound came under heavy pressure after the Bank of England released a quarterly report on inflation, and after the show the head of the Central Bank Governor Mervyn King. The report of the Bank of England reported that UK GDP will remain below pre-crisis levels until 2015, and the CPI will exceed the target mark in the next three years. Head of CB King believes that restoring the UK economy will go more slowly, and that further monetary stimulus will support only market optimism, but not growth. The pound fell to a six-month low against the dollar after the King spoke of the need for further measures to stimulate foreign demand, while hinting that further currency depreciation would help improve the situation.