(MENAFN- The Peninsula) The dollar strengthened against most major counterparts following the FOMC press conference as the Federal Reserve have cut their monthly bond purchases by another $10bn, continuing on Bernanke's tapering programme. Moreover, the dollar gained further against the euro and the sterling, as geopolitical risks escalate over the Crimean crisis
The euro started the week at 1.3914, gaining only slightly, as stops hit, after last weeks' rally to 1.3970, reversing early losses. The single currency range traded during the middle of the week in anticipation of the FOMC. The euro touched a high of 1.3748, and then plummeting to break the previous lows, the Federal Reserve has cut another $10bn from their assets purchase programme. The euro fell following the Fed's announcement to touch a low of 1.3749. The single currency regained some of its losses on Friday and ended the week at 1.3794
The Sterling Pound fell over 150 basis points against the dollar during the week. The Pound opened at 1.6647, falling to a 5-week low against the dollar, after Russian President Vladimir Putin expressed his support to Crimea's request to join Russia, while the Ukraine expressed their disapprovals, sending fear and uncertainty on the political confrontations in the area. The pound regained some of its losses, on to drop significantly against a much stronger dollar on Thursday following the Fed's decision. The pound continued to drop to touch a low of 1.6476, and ending the week at 1.6487
The Japanese yen was one of the biggest losers last week, as it weakened more than 100 basis points against the greenback. The currency opened the week at 101.36, weakening to 101.80, on speculation over the Fed's decision. The Japanese Yen then fell considerably to touch a low of 102.68 against the greenback. The Yen closed at 102.25
The Aussie dollar opened the week at 0.9028, only to gradually strengthen against the dollar. The currency gained to a high of 0.9140. The Aussie strengthened against the greenback after major banks dropped their forecast for further Reserve Bank rate cuts this year. It reversed an earlier drop as Russian stocks advanced, linking concerns about the fallout from Crimean vote. The Australian dollar then followed suit with major currencies, dropping dramatically against the dollar to touch a low of 0.8993. The AUD ended the week at 0.9081
Federal Open Market Committee decided to cut its assets purchases by $10bn for the third straight meeting in March to $55bn a month from $65bn starting in April. Meanwhile the Fed left the target range for the federal funds rate at zero to 0.25 percent. The Fed shifted its forward guidance on how long it plans to keep short-term interest rates at exceptional low levels, discarding the 6.5 percent threshold on the unemployment rate. The Fed said it would now consider a wide range of factors instead of relying mainly on the unemployment rate. Moreover, Federal Reserve officials expected their target interest rate would be at one percent at the end of 2015 and 2.25 percent a year later, higher than earlier forecast, as they improved the projections for gains in the labour market. The statement said: "The Committee continues to anticipate based on its assessment of these factors, that it likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends". During the press conference, when asked about a period for the "considerable time" mentioned in the statement, Chair Janet Yellen said that it is "something on the order of around six months"
German investor confidence fell in February for a third consecutive month, a sign that the recovery for the German economy is being burdened by the Crimean crisis, which poses a risk to the continents' powerhouse. The ZEW investor Confidence index fell to the lowest level since August, sliding considerably more than the forecasted 52.8, to 46.6, from 55.7 the previous month. While German economic growth in the fourth quarter exceeded estimates, increasing tensions over the Russian stance against the Crimean peninsula, and flat performance by Euro-area countries, Germanys' biggest trading partner, is damping the country's output, signaling uncertainty in the European economy
The United Kingdoms' unemployment rate held steady in the three months through January, while Bank of England policy makers stated that the Pound's advance against the US Dollar is keeping price pressures in check. The jobless rate came at 7.2%, unchanged from the last quarter of 2013. The Bank of England stated, "Sterling had appreciated by another 1.5 percent during the month, and it was possible that this gradual appreciation would continue if prospects in the UK continued to be seen as increasingly favorable relative to those of its main trading partners"
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