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Market Review October 13, 2014

October 13th, 2014 


Last week, the EUR/USD pair reached a new two-year low. It declined following strong Nonfarm payrolls data. This data also increased speculation regarding an interest rates increase. It may occur earlier than expected. This week, there is the potential of higher volatility due to the U.S. market remaining closed. This Wednesday, Maro Draghi is speaking at the 7thStatistics Conference, organized by the European Central Bank. Make sure you pay attention to this speech. On Thursday, the EU inflation data will be released. Pay attention to this is well, because it may cause some further downward pressure on the pair.

The price of gold also depreciated last week. It decreased to $1,182/ounce. However, it then recovered to $1,230/ounce. The precious metal originally increased to a weaker dollar and the physical demand. Then, however, a price increase occurred due to a negative global outlook. The International Monetary Fund downgraded the global outlook for 2015, and stated that the pre-crisis pace of growth may never be reached again. Such a statement caused a sharp decline in the stock market. This week pay attention to the U.S. data and to speeches by FOMC members. On Thursday, Charles Plosser will speak about economic outlook.

The GBP/USD pair saw some changes last week. Initially, it increased by 275 pips before reversing at the 1.6225 level. At the end of the week, the pair saw price correction. Currently, it is moving around the 1.6115 level. This week, pay attention to the U.K. CPI data, which will be released Tuesday. Unlike the EU, the U.K. does not face low inflation pressure. The release is expected to come out around 1.4%. On Friday, Janet Yellen is giving a speech on the Inequality of Business Opportunity at the Boston Economic Conference.