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FUNDAMENTALS OF CURRENCY:

* The dollar index lost significant ground this week, moving away from the 92 region to break below 91.50 for the first time in a month. The market moves came in tandem with a retracement in Treasury yields, which bottomed around monthly lows of 1.55%. On top of that, the ongoing outperformance of the US economy failed to offer lasting support. A slew of data releases in the US calendar, including upbeat retail and jobless claims data, drove investors into riskier assets. Aside from the economic indicators, the Federal Reserve’s insistence that it will keep financial conditions as lenient as possible.

* The US Dollar (USD) has been weakening as Federal Reserve speculation softens, and the Euro US Dollar (EUR/USD) exchange rate has been capitalising on this. Demand for the Euro (EUR) is also finding a little support from improving Eurozone recovery hopes. Since opening this week at the level of 1.1900, EUR/USD has been continuing to advance. PMI projections and European Central Bank (ECB) news could influence the Euro and US Dollar next week.

* The GBP/USD rose further and climbed to 1.3825 during the American session, reaching the highest level since April 7. Cable remains near the top, supported by a strong performance of the pound and amid risk appetite. On a weekly basis, GBP/USD rebounded from the 20-week simple moving average that stands around 1.3700 and erased last week's losses. The pound so far is having the best weekly performance since early February.

Technical indicators (Daily):

* RSI- 62.6447

* MACD- 0.5514

* MOVING AVERAGES (20,50,100)- (73.6887/73.1458/73.2475)

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