Forex: Thursday’s review

Yesterday the euro strengthened against the dollar after Spain announced its fifth austerity package, stating that it will comply with the requirements of the European financial rescue to contain the debt crisis.

The single currency rose after it reached a two-week low against the dollar as European Commissioner for Economic and Monetary Affairs Olli Rehn said that the budget plan Spain "meets country-specific recommendations and even goes beyond them in some areas. " The dollar weakened against most currencies after the published data, which showed that the number of applications for unemployment benefits in the U.S. fell much more than expected. At the same time, for the first time in six days rose stocks pulling the rise in oil prices.

Finally, we note that an element that is now viewed as a positive, increases the likelihood that Spain will get its financial assistance.

The pound rose for the first time in four days against the dollar after a government report showed that the economy shrank less than previously estimated in the second quarter, adding optimism that the recession is waning.

Sterling rose to a three-week high against the euro after the Spanish protests were held in Madrid for an end to austerity measures. General strike in Greece attracted 35,000 protesters in central Athens. It is learned that the UK's gross domestic product fell by 0.4% in the second quarter, not 0.5% reported last month.