Market Review - 24/01/2014 19:28GMT

Yen and Swiss franc rally on risk aversion

The Japanese yen and Swiss franc surged against U.S. currency on renewed risk aversion on Friday due to the selloff in global stock markets. Britain's FTSE 100, Germany's DAX, and France's CAC 40 closed down 1.7%, 2.6% n 2.9% respectively whilst Dow Jones index fell by more than 250 points to close below 16000. The greenback tumbled to as low as 102.00 and 0.8904 versus the Japanese yen and Swiss franc respectively.

The single currency traded with a firm undertone in Asia and then climbed to 1.3740 at European midday due to dollar's broad-based weakness before retreating briefly to 1.3669 in New York morning. Euro tumbled against Swiss franc to 1.2227.

The British pound rallied to a fresh 3-year high of 1.6668 against U.S. currency on Friday on continued speculation the Bank of England could raise interest rates before the end of the year, however, active profit-taking knocked price lower. Cable tanked to 1.6478 after BoE Governor Carney's downbeat comments. BOE's Carney said appreciation of sterling will hold back expansion of net exports.

In other news, European Central Bank President Mario Draghi told the World Economic Forum in Davos, Switzerland, that he did not see deflation in the euro area, which he said is experiencing a "weak, fragile and uneven" recovery. Draghi added that the ECB's "very accommodative" monetary policy is being passed into the euro zone economy; the other thing we are seeing in the last 3-4 months, is that both the improvement in financial markets and our very accommodative monetary policy in place since end 2011.

Data to be released next week :

Japan trade balance, Germany import price index, Ifo business climate, current assessment, expectations, U.S. new home sales on Monday. Australia. New Zealand financial market will be closed due to public holiday.

Australia NAB business confidence, France consumer confidence, Italy consumer confidence, U.K. GDP, U.S. durable goods, S&P home price, consumer confidence on Tuesday.

Australia Westpac leading economic index, U.K. nationwide house prices, Germany consumer confidence, Swiss UBS consumption indicator, U.K. FOMC rate decision on Wednesday.

Japan retail sales, China HSBC manufacturing PMI, Swiss KOF indicator, Germany unemployment rate, U.K mortgage approvals, EU business climate, economic sentiment, consumer confidence, Germany CPI, HICP, U.S. annual GDP, PCE core, personal consumption, jobless claims, pending home sales on Thursday.

New Zealand trade balance, Japan manufacturing PMI, household spending, unemployment rate, national CPI, Tokyo CPI, industrial production, housing starts, construction orders, U.K. Gfk consumer confidence, Lloyds business barometer, France PPI, Italy unemployment rate, PPI, EU CPI, Canada GDP, U.S. housing starts, personal income, spending, PCE, Chicago PMI, U. of Michigan consumer confidence on Friday. Financial markets in China, Hong Kong, Indonesia, Malaysia, Singapore, South Korea, Taiwan and Vietnam will be closed for Chinese New Year holiday