(MENAFN - Kuwait News Agency (KUNA)) Since the end of the US election, The US Dollar index failed to make new highs despite the sharp drop in stocks, National Bank of Kuwait (NBK) said in its currency report Sunday.
The weakness in currencies last week was in commodity currencies and the Yen. Indeed, equity markets sold off heavily during the week on worries that the US politicians would not be able to solve the fiscal cliff.
The main game in the US remains the ongoing painfully slow negotiations between both parties while the end of the year is approaching quickly and investors continue their profit taking.
Over in Asia, market attention turned this week to Japanese politics, where opposition leader Abe called for "unlimited" monetary policy easing while Japanese Prime Minister Yoshihiko Noda dissolved the parliament ahead of a general election. In China, the Chinese leadership transition continues while Asian markets remain skeptical about the potential reforms, the report indicated.
As European headlines took a backseat this week, the Euro remained resilient as European politicians continue to negotiate another Greek debt relief program and announced that they agreed to give Greece two more years to meet their budget deficit targets.
The Euro range traded this week started Monday at a low of 1.2714, reaching a high of 1.2802 after the Greek decision however could not maintain gains to end the week at 1.2743.
After starting the week on a positive note, The Sterling Pound dropped after Bank of England Mervin King mentioned that they had decided to freeze their main stimulus program due to the higher inflation in the U.K. The Pound ended the week at 1.5883.
Meanwhile, and in a speech delivered on Thursday in Atlanta, US Federal Reserve Chairman Ben Bernanke, said the improving housing market is "far from being out of the woods" and "although there are good reasons to be encouraged by the recent direction of the housing market, we should not be satisfied with the progress we have seen so far." On global demand on gold, the report said that it dropped 11 percent in the three months to September from record levels seen in the same period last year.
Main reasons cited were fading Chinese demand as its economy slowed, with Indian demand experiencing a larger fall according to the world gold council.
Chinese gold consumption fell eight percent in the July to September period, while bar and coin investment dropped 12 percent.
Gold prices however were supported over the USD 1,700 level on prospect that the Fed would continue its quantitative easing program well into 2013, the report noted.