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EUR/USD EUR/USD lost marginally last week as the U.S. Fed extended its Operation Twist through the end of the year and the New Democracy pro-bailout party won enough votes in the Greek parliament to form a coalition government.  The week began on a positive note as the Euro gapped up on the opening making its weekly high of 1.2747 after the results of the Greek parliamentary election showed the pro-bailout New Democracy party prevailed and as the G20 met in Mexico. The rally then faded after Spanish bond yields went over the 7% unsustainable threshold which eventually led to the bailouts of Ireland, Greece and Portugal. The rate then reversed direction on Tuesday, trading higher as the G20 concluded their second day of meetings in Mexico and after the Spanish Treasury held a successful bill auction despite yields on 12-month bills jumping to 5.07% from a previous 2.98% in May. Tuesday's economic data had German ZEW Economic Sentiment print at -16.9, significantly worse than the +3.8 reading expected, also EZ ZEW Economic Sentiment came out at -20.1, versus an expected -5.7 print. U.S. numbers had Building Permits increase to +0.78M, versus +0.73M expected, and Housing Starts, which came out as expected at +0.71M. On Wednesday, the rate consolidated at a slightly higher level after the FOMC left the benchmark Fed Funds Rate at <0.25%. The Committee stated that it had "decided to continue through the end of the year its program to extend the average maturity of its holdings of securities. Specifically, the Committee intends to purchase Treasury securities with remaining maturities of 6 years to 30 years at the current pace and to sell or redeem an equal amount of Treasury securities with remaining maturities of approximately 3 years or less." The rate then resumed selling off on Thursday as Spain auctioned €2.22B in medium term debt securities, which reached record high yields. Economic numbers on Thursday had German Flash Manufacturing PMI print at 44.7, versus an expected 45.3 reading. Also out were U.S. Existing Home Sales at 4.55M, versus 4.58M expected and the Philly Fed Manufacturing Index, which printed at -16.6, significantly lower than the increase of +0.7 that was expected.  The rate then recovered somewhat after making its weekly low of 1.2519 after the ECB announced it would reduce the rating threshold and eligibility requirements for certain asset backed securities to increase available collateral indicating the bank would stage another LTRO. EUR/USD went on to close at 1.2568, showing an overall loss of -0.5% from its previous weekly close.

USD/JPY USD/JPY gained significantly last week as the Fed left rates unchanged and continued Operation Twist until the end of the year and as the BOJ indicated it would continue providing economic stimulus. The week began on a positive note as the rate rose marginally after the BOJ's Monthly Report indicated that, "The overnight call rate has remained at an extremely low level, and firms' funding costs have declined moderately. With regard to credit supply, firms have continued to see financial institutions' lending attitudes as being on an improving trend." The pair then declined somewhat on Tuesday despite positive housing news out of the United States. On Wednesday, the rate began rising after the Fed announced it would continue Operation Twist until the end of the year and after the BOJ's Monetary Policy Meeting Minutes stated that "In relation to monetary policy for the immediate future, members shared the view that Japan's economy faced the critical challenge of overcoming deflation and returning to a sustainable growth path with price stability." Also out was the Japanese Trade Balance, which showed a deficit of -0.66T, versus an expected deficit of -0.36T. The pair continued higher on Thursday as the United States reported mixed economic data. The rate then made its weekly high of 80.56 on Friday before settling at 80.41, showing an overall gain of +2.1% for the week. 

GBP/USD GBP/USD fell last week as the Fed left rates unchanged and the MPC Meeting Minutes showed more members in favour of further easing. The week began with the rate gapping higher on Monday in part due to the pro-bailout vote in the Greek parliament. Also supporting the rate was the UK Rightmove HPI, which increased by +1.0% m/m, versus a previous flat reading. Cable continued higher on Tuesday after UK CPI came out at 2.8%, versus 3.0% expected and UK RPI, which rose by +3.1%, versus +3.3% expected. On Wednesday, the rate made its weekly high of 1.5777 before falling marginally after the BOE's MPC Meeting Minutes stated that, "a significant current impediment to the economic recovery in the United Kingdom lay in the interaction between the financial threats emanating from the euro area, their implications for bank funding costs, and consequently for lending to businesses and households." The Meeting Minutes showed a unanimous decision to leave rates unchanged but more division on the Asset Purchase Facility, with 5 members in favour of leaving the program unchanged while 4 members voted to raise it. Also out was UK Claimant Count Change showing an increase of +8.1K versus an expected decline of -3.1K. Cable then fell sharply on Thursday despite UK Retail Sales increasing by +1.4% m/m, versus an expected +1.1% increase and UK CBI Industrial Order Expectations which fell by -11, versus an expected decline of -19. The rate then made its weekly low of 1.5556 on Friday before trading up to close at 1.5580 showing an overall loss of -0.8% for the week.

AUD/USD AUD/USD lost fractionally last week as the RBA's Monetary Policy Meeting Minutes for June indicated that it would lower rates further if the Australian economic situation continued deteriorating. The rate started the week gapping higher as news of a favourable vote in the Greek parliament affected risk assets and Australian New Motor Vehicle Sales increased by +2.4% m/m, versus a previous reading of -1.0%. The pair continued higher on Tuesday after the RBA's Monetary Policy Meeting Minutes for June stated that, "Renewed pessimism about Europe and weaker economic data in other major countries had led to expectations of further declines in the Australian cash rate, with the market pricing in a reduction of at least 25 basis points at the current meeting, as well as further sizeable reductions over the balance of the year." Wednesday saw the rate make its weekly high before ending slightly lower after the U.S. Federal Reserve indicated it would continue its Operation Twist program until the end of the year. Economic data had the Australian MI Leading Index increase by +0.5% m/m and the CB Leading Index decline -1.4% m/m, versus previous readings of +0.5% and -0.2% respectively. The pair fell sharply on Thursday as the Greenback gained against most major currencies despite unfavourable U.S. economic data. The rate then made its weekly low of 1.0007 on Friday before trading up to close at 1.0061, showing a loss of only 11 pips for the week and virtually unchanged. 

USD/CAD USD/CAD rose last week as Canada reported mixed economic data and the U.S. Federal Reserve left rates unchanged. The rate began the week gapping lower as news of a favourable outcome for the Greek parliamentary vote weighed on the U.S. Dollar. Also, Canadian Foreign Securities Purchases increased to +10.20B versus an expected +3.41B. The pair dropped sharply on Tuesday after Canadian Wholesale Sales, which increased by +1.5% m/m, versus an expected +0.4% increase. The rate continued lower on Wednesday, making its weekly low of 1.0158 after the Fed announced it would continue its asset repurchase program until the end of the year. On Thursday, the pair traded sharply higher after Canadian Retail Sales declined -0.5% m/m, versus an expected increase of +0.3% and Core Retail Sales sliding -0.3%, versus an expected rise of +0.2%. The rate then made its weekly high of 1.0299 on Friday after Canadian CPI declined -0.1% m/m, versus an expected increase of +0.2% and Core CPI, which rose +0.2% versus an expected +0.3% increase. USD/CAD went on to close at 1.0242 showing an overall gain of +0.3% from its previous weekly close. 

NZD/USD NZD/USD rose fractionally last week as the Fed left rates unchanged and New Zealand reported a higher than expected GDP number. The week began on a positive note as the pair gapped higher in response to the favourable vote in the Greek parliament. Also, NZ Westpac Consumer Sentiment came out at 99.9, versus a previous reading of 102.4. The pair continued higher on Tuesday in sympathy with the Australian Dollar and after the release of the RBA's Monetary Policy Meeting Minutes. On Wednesday, the rate dropped after the U.S. Federal Reserve left rates unchanged and announce the extension of its Operation Twist. Also, the New Zealand Current Account came in at a deficit of -1.13B as widely anticipated. The pair then made its weekly high of 0.8013 on Thursday before dropping sharply after New Zealand GDP increased by +1.1% q/q, versus an expected increase of +0.5%. On Friday, NZD/USD made its weekly low of 0.7844 before trading up to close the week at 0.7898, showing an overall increase of +0.3%.