Weekly Review 16.11.2009

By IBTimes Staff Reporter | November 16 2009 4:46 AM

The Dollar continued to weaken versus most majors as carry trade and risk appetite remained the main source for the Dollar's weakness. The Widening deficit in the Trade Balance and an unexpected drop in Michigan's Consumer Sentiment worried investors about the recovery but gains in stocks left risk appetite strong. NASDAQ and Dow Jones gained by 2.62% and 2.46% respectively. Crude Oil declined by -0.98% the past week closing at 76.35$ a barrel after probably making a false break below 76$. Gold (XAU) continued making new highs closing at 1,118.41$ an ounce with a 1.8% weekly gain. Looking ahead, Retail Sales on Monday are expected stronger with 1% versus -1.5% prior as consumer spending rises. U.S CPI will be released on Wednesday and is expected with 0.1% versus 0.2% prior, CPI will reveal more information on the looming inflation.

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The Euro gained by 0.4% versus the Dollar the past week keeping with the uptrend, but a failure to break above the 1.5050 level may signal a forming of a double top in the EUR/USD that could lead to sharp declines in the Euro. German Prelim GDP was released weaker than expected with 0.7% but still showed growth. Overall, EUR/USD traded with a high of 1.5047 and a low of 1.4820. Looking ahead, European CPI is expected unchanged with -0.1% and will be released on Monday. Trade Balance is expected with -0.9B versus 1B prior and will be released on Tuesday. German PPI is expected higher with 0.1% versus -0.5% prior on Friday.

The Pound gained 0.4% versus the Dollar after holding above key technical support levels. Fitch Ratings held a cautious outlook for the U.K and said the AAA credit rating is at risk. Overall, GBP/USD traded with a high of 1.6843 and a low of 1.6515. Looking ahead, CPI on Tuesday is expected stronger with 1.4% versus 1.1% prior. MPC Meeting Minutes will be released on Wednesday along with CBI Industrial Order Expectations. Retail Sales are expected stronger with 0.6% versus 0% prior on Thursday.