By Alex Edwards at UKForex, an international money transfer service It was a slow start in FX markets last week. EUR/USD continued to trade higher on the back of ECB’s decision to leave its benchmark rate unchanged. China’s first corporate bond default a week earlier, when solar equipment company Chaori Solar failed to make an interest payment, sparked some fears that this might create a “domino effect”, in turn creating a bit of a liquidity squeeze. It naturally saw equity prices slide and saw the USD generally well bid through the middle of the week. The “domino effect” concerns were perhaps overstated, so much so that EUR/USD held on to the 1.38 figure. EUR/USD continued to gain ground as the end of the week approached, pushing through stops over 1.39. The ECB’s Governing Council member Jens Weidmann was speaking on Thursday following the publication of yearly results by the Bundesbank. He said that the exchange rate was not a policy target for the ECB and that there would be no reaction to daily changes in the value of the euro. Markets took that as a green light to buy EUR/USD. The single currency was bid higher further as he went on to say that he anticipated a gradual rise in the inflation rate and that the risk of deflation was limited. Just as it was looking like it might go on to siphon through 1.40, ECB President Draghi came on the wires saying that the ECB were preparing non-standard monetary policy measures to guard against the threat of deflation, warning that the bank would take decisive action if needed. He continued by saying that the exchange rate was “becoming increasingly relevant in our assessment of price stability”. EUR/USD dropped back below 1.39 come Friday morning. Cable tracked EUR/USD for most of the week, popping through 1.67 on Thursday as the greenback lost ground across the board. It was fairly unresponsive to the Inflation Report Hearings on Wednesday as Governor Carney said little that the markets didn’t know already. In other news, tensions began to rise in the Russia/Ukraine region ahead of a controversial referendum at the weekend in Crimea. The US Secretary of State said on Thursday that there would be serious steps taken by the US and Europe against Russia, should the referendum go ahead. The USD made an about turn late in the week as investors sought safety and GBP/USD fell back towards 1.66. AUD and NZD both rallied last week. The RBNZ increased interest rates by 0.25% on Wednesday to 2.75%. There was a chance of a 0.5% rate hike, although it was only about 30% priced in. In his accompanying statement, RBNZ Governor Wheeler signalled that further rate hikes were on the horizon and in nearly the same breath attempted to talk down the kiwi, an almost impossible task. He said that the bank doesn’t “believe the current level of the exchange rate is sustainable in the long run.” NZD/USD jumped to a five month high on the back of the policy decision and finished the week above the 85 US cents level. AUD/USD gapped higher on Thursday following the release of incredibly strong local employment data. It showed that 47,300 jobs were created last month, vs. expectations for 15,300 jobs, with the unemployment rate remaining at 6%/. AUD/USD closed the week above .9000. The Russia and Ukraine story will likely exert influence on FX markets in the early part of the coming week. Other than that, focus will turn to the FOMC statement, UK employment data and Meeting Minutes from the BoE and RBA. Further reading: Temporary Insanity and USDJPY Guest Guest View All Post By Guest Forex News Today: Daily Trading News share Read Next FxPro wins “Best FX Services Provider” award Yohay Elam 8 years By Alex Edwards at UKForex, an international money transfer service It was a slow start in FX markets last week. EUR/USD continued to trade higher on the back of ECB's decision to leave its benchmark rate unchanged. China's first corporate bond default a week earlier, when solar equipment company Chaori Solar failed to make an interest payment, sparked some fears that this might create a "domino effect", in turn creating a bit of a liquidity squeeze. It naturally saw equity prices slide and saw the USD generally well bid through the middle of the week. 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