Commodities may have got a bit of a sniff midweek, but gold finished with a thump, down under $US900 an ounce and currencies took centre stage, especially those from major commodity producing countries.
The US dollar and the yen eased as a result of the better tone in sharemarkets and raised optimism about the global and some major economies.
As well the outcome of the Group of 20 summit in London was seen as positive, especially the promise of fresh funds to fight the crisis.
The purchasing managers’ indices for March from the US, UK and China all beat expectations, but other surveys were more mixed, but not as gloomy as for earlier months.
Currencies of commodity producing countries rose, with the Australian dollar up 3.4% to 71.51 cents against the US dollar on the week and the New Zealand dollar climbing 2.7% to $US0.58340 on Friday.
The US dollar fell 1.5% to $US1.3424 against the euro on the week. The yen fell nearly 4% against the euro, the greenback rose 2% against the yen…
The euro got extra support from the European Central Bank’s decision to cut interest rates by 0.25%, less than the expected 0.50%.
Currencies in emerging markets performed strongly.
The Brazilian real rose 3.2% over the week, the South African rand climbed 5.5% and the South Korean won gained 1% to Won1,335.50.
Central and eastern European currencies, which have weakened sharply on renewed fears about their financial problems and huge debts, rose: the Hungarian forint rose 4.1% against the dollar over the week, while the Polish zloty climbed 5.5%.
There’s a strong "rubbish and trash" factor here, just as there was in equities.
The likes of AIG and Citigroup (plus some banks in Austria and Central Europe, rose strongly, as did struggling European car groups like Fiat).
That’s a pointer to the ‘bear’ nature of this rebound, just as the sharp rises in the currencies in central Europe and some commodity producing countries is also more a reflection of punters making hay rather than an essential improvement in underlying economic or business conditions.
The Australian and New Zealand dollars are now looking at their fifth weekly gain this week as the new optimism is maintained. The Aussie dollar touched 72.30 US cents on Thursday, its highest rate since early January.
The two currencies touched their highest since January last week as markets and commodities kicked higher. The Kiwi was up 5% over the week in all.
Both currencies also gained after China, Australia’s fastest growing trading partner, said Friday manufacturing was expanding.
The yen Friday weakened to above 100 per dollar for the first time in five months as the G-20 pledge cut demand for Japan’s currency as a refuge. It ended the week at 100.31 in New York.
That will be welcomed by stricken Japanese exporters, especially car and electronics exporters.
The New Zealand’s dollar advanced to the highest level against the yen since November
Among commodities copper extended its push beyond $US4,000 a tonne, leading a broad advance across the base metals sector.
Copper finished in new York at $US 1.9915/pound, its highest since early October. It peaked over $US2 a pound briefly on Friday.
It rose more than 9% over the week in New York to trade around $US4,300 a tonne.
Agricultural commodities also made strong gains after the US government published its first analysis of which crops American farmers would plant this spring in a report that suggested good growing conditions would be required to prevent supply tightness developing in the corn and soybean markets. Wheat was clouded by weather issues in growing areas.
Over the week, CBOT May soybeans rose 7% May corn gained 3.4% and CBOT May wheat increased 9%.
Gold fell below US$900 a troy ounce on Thursday.
It recovered on Friday, then fell $US11.60 to settle at $US897.30 an ounce. That was down around 3% over the week.
Oil prices have ended the week mixed as the weak US jobs report reminded traders of the poor state of the US economy.
Nymex May crude futures ended Friday at $US52.51 a barrel.
In London, Brent North Sea crude for delivery in May rose to $US53.47 a barrel, after jumping $US4.31 on Thursday.
Oil finished up around 3% over the week in London but in New York it was flat.
