The positive market sentiment, caused by last week’s European summit, completely evaporated this week, allowing the US dollar to gains against most of major currencies. Of course, the same risk aversion also boosted the yen, helping it to outperform the greenback. Against the euro, the US currency jumped to the highest level in two years.
The first major theme of this week was monetary policy decisions of central banks. The European Central Bank cut its main interest rate, while the Bank of England kept the key rate steady, but expanded the size of the asset purchase program. That was expected events. The interest rate cut of China’s central bank — that was a real surprise to all economists and traders. It sparked fear that the economy of the Asian nation is
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