Forex: Friday’s review

On Friday trading the yen and the dollar strengthened, which was caused by the flight of investors in these assets due to concerns that a deal to reduce the deficit will not be achieved, against which spending cuts and tax increases will not be possible to avoid.

The single currency has lost all of his conquered during the day, the position relative to the dollar, after it was reported that a scheduled vote on the plan, Speaker John Boehner was canceled. Note that members of the House of Representatives and the Senate decided to continue voting after Christmas. Note that to solve the problem they will have less than a week. Meanwhile, to reach an agreement, Boehner should receive sufficient support from the Republicans, and to maintain control over his party, relying on the votes of Democrats who need to take any action. In addition, the decline of the euro has also been caused by the statement that the Italian Prime Minister Mario Monti will retire.

Showed a significant drop and the pound, which fell to a seven-week high against the dollar after a report showed that the UK economy grew in the third quarter, less than previously estimated, and the budget deficit unexpectedly increased last month. It is learned that the gross domestic product grew by 0.9%, while the original estimate was 1%. Between it, the deficit without state support of banks was 17.5 billion pounds compared with 16.3 billion pounds a year earlier.

In addition, the London research group GfK said its sentiment index fell to -29 in November from -22 in November, which was the highest level since May 2011.