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EUR/USD EUR/USD extended its previous week's gains last week as the U.S. Dollar declined against all major currencies amid a decrease in risk appetite with additional stimulus measures being considered by the Fed and other major central banks. The week began on a soft note with the rate trading sharply lower after making itsweekly high of 1.2668 on Monday as optimism for a bailout of €100B to Spanish banks faded. On Tuesday, the rate reversed direction trading higher after making its weekly low of 1.2442 despite rising bond yields in Spanish and Italian bonds. The pair continued gaining strength on Wednesday as bond yields began to recede and EZ Industrial Production came out with a decline of -0.8% m/m, versus an expected decline of -0.9%. Also, U.S. Core Retail Sales declined by -0.4% m/m, versus an expected increase of +0.1% and Retail Sales, off by -0.2% m/m, versus an expected -0.1%. U.S. PPI was also disappointing, declining by -1.0% m/m, versus -0.6% expected. The rate continued improving on Thursday despite Spanish 10-year bonds breaching the unsustainable 7% level and after a three notch downgrade by Moody's of Spain's credit rating, from A3 to Baa3. Economic numbers on Thursday had EZ CPI increase by +2.4% y/y, while the Core number increased by +1.6% y/y, both numbers as widely anticipated. Also, U.S. CPI declined by -0.3% m/m, versus -0.2% expected and Core CPI, increasing by +0.2% m/m as widely anticipated. The rate then consolidated at a slightly higher level of Friday as traders awaited the Greek parliamentary vote on the 17^th and after a speech by ECB President Mario Draghi, in which he stated, "The Euro system will continue to supply liquidity to solvent banks where needed," EUR/USD went on to close the week at 1.2636 showing an overall gain of +0.9% from its previous weekly close.

USD/JPY USD/JPY lost ground last week as the BOJ left rates unchanged and the United States reported lower than expected economic numbers. The week began with the rate trading moderately lower despite the Japanese BSI Manufacturing Index declining by -5.7, versus an expected reading of -2.4. The pair then rose on Tuesday as Japanese Tertiary Industry Activity declined by -0.3% m/m, versus an expected increase of +0.4%. On Wednesday, the pair fell marginally after making its weekly high of 79.74 after Japanese Core Machinery Orders increased by +5.7%, more than double the expected increase of +2.0, while the United States reported weaker Retail Sales and PPI numbers.  The rate then consolidated on Thursday on a weaker than expected U.S. CPI number. The pair then made its weekly low of 78.59 on Friday after the BOJ left its benchmark Overnight Call Rate unchanged at <0.10%. In the central bank's Monetary Policy Statement, the bank noted that "In global financial markets, some nervousness continues to be seen, mainly due to concern about the European debt problem. Particular attention should therefore be given to developments in these markets for the time being." At a press conference after the rate decision, BOJ Governor Masaaki Shirakawa stated that, "There are no cunning steps to achieve financial system stability. An orthodox step would be to provide liquidity. We have the means to provide own currency and foreign currencies. It would be important to supply abundant liquidity to calm worries. The Bank of Japan will take all possible measures to ward off harm to the country's financial system." USD/JPY went on to close at 78.67 with an overall loss of -1.0% for the week.

GBP/USD GBP/USD extended its previous week's gains rising sharply last week after George Osborne, Chancellor of the Exchequer unveiled a £140B plan to save the British economy. The week began with the rate trading lower on Monday after comments in the Sunday Telegraph newspaper by Osborne, in which he stated, "Our recovery - already facing powerful headwinds from high oil prices and the debt burden left behind by the boom years - is being killed off by the crisis on our doorstep." Cable then made its weekly low of 1.5468 on Tuesday before trading higher after the UK RICS House Price Balance came out at -16%, versus an expected -17% print, while UK Manufacturing Production declined by -0.7%, versus an expected flat reading.  The pair then dropped sharply on Wednesday as Sterling was pressured by events in the EZ and despite lower than expected Retail Sales and PPI data from the United States. Cable then began climbing on Thursday after plans were announced that the UK Treasury along with the BOE would implement a plan to loosen credit by offering loans to banks under the market rates for a period of three to four years. Also, the BOE will implement the Extended Collateral Term Repo facility that will provide six month liquidity against many forms of collateral. News of the additional stimulus measures carried into Friday, driving the rate to make its weekly high of 1.5725 before trading lower as the UK Trade Balance showed a deficit of -10.1B, versus -8.5B expected. GBP/USD went on to close at 1.5710, showing an overall gain of +1.5% for the week.

AUD/USD AUD/USD continued rallying last week as risk assets were favoured over the Greenback and with little in the way of economic data out of Australia. The week began with the rate trading sharply lower on Monday as concern over the EZ affected risk appetite. On Tuesday, the rate reversed direction trading higher after making its weekly low of 0.9849 after the Australian NAB Business Confidence survey came out with a reading of -2, versus a previous reading of +4. The pair consolidated at a slightly lower level on Wednesday as the Australian Westpac Consumer Sentiment index printed at +0.3% versus a previous reading of +0.8% and the United States reported disappointing Retail Sales and PPI data. The rate then traded higher on Thursday as Australian MI Inflation Expectations printed at +2.3% versus a previous reading of +3.1% and the United States reported a disappointing CPI number. The pair then made its weekly high of 1.0088 on Friday before settling at 1.0072, showing an overall gain of +1.6% from its previous weekly close.

USD/CAD USD/CAD lost ground last week as the Loonie joined the other commodity currencies rallying against the Greenback. The week began on a strong note with the rate rising off of its weekly low of 1.02 on Monday in reaction to news from the Eurozone. On Tuesday, the pair declined after making its weekly high of 1.0324 as the prospect of further economic stimulus drove risk assets higher. Wednesday saw the rate trade higher despite disappointing economic data out of the United States. The pair then fell sharply on Thursday as the United States reported a lower than expected CPI number, while Canadian NHPI increased by +0.2% m/m, versus +0.4% expected. The pair went on to close at 1.0213 on Friday, showing an overall loss of -0.5% for the week.

NZD/USD NZD/USD gained considerable ground last week as the RBNZ left rates unchanged and the United States reported weaker economic data. The week began with the rate trading sharply lower as the Greenback firmed in reaction to news in the Eurozone. The pair then began trading higher after making its weekly low of 0.7859 on Tuesday in the absence of any significant economic data out of either country. The rate consolidated at a slightly lower level on Wednesday as the RBNZ left its benchmark Official Cash Rate unchanged at 2.5% as widely expected. In the RBNZ's published statement after the rate release, the central bank stated, "Political and economic stresses in Europe, along with a run of weaker-than-expected data, have seen New Zealand's trading partner outlook worsen. Furthermore, there is a small but growing risk that conditions in the euro area deteriorate more markedly than is projected in the June Statement."  On Thursday, the pair began trading higher as the United States reported a lower than expected CPI number and rising Unemployment Claims. The pair then made its weekly high of 0.7898 on Friday as the United States reported lower than expected economic numbers. NZD/USD went on to close at 0.7871, showing an overall gain of +2.2% from its previous weekly close.