The Australian and New Zealand dollars enjoyed a day of strengthening yesterday, after previous declines for both currencies. The currencies followed other Asian currencies and stock markets. Gains in the Asian region suggest that their economies will expand, creating more demand for raw materials from both Australia and New Zealand.

There were also domestic news leading to appreciation of the Australian and New Zealand dollars in the forex market. Australia reported that the country’s business confidence reached a 6-month high and New Zealand announced that more houses are currently being built.

The Australian dollar gained 10 basis points against the yen and 30 basis points against the U.S. dollar, making the net loss 0.3 percent both yesterday and the day before. The New Zealand dollar managed to appreciate 50 basis points against the U.S. dollar yesterday.

The South African rand has been enjoying gains against the U.S. dollar the past couple of days, much like other emerging-market currencies. However, the appreciation stopped today as the appetite for risk once again shrank.

South Africa has two main problems, the first is that European leaders are having a tough time finding a solution for the current debt crisis, which has a negative effect on their currency. The other issue is that the domestic economy is looking weak, and that previous gains of over 2 percent have mainly been a reaction to global news rather than progress in the country itself.

The South African rand weakened 100 basis points, a full percent, against the U.S. dollar. The South African currency also lost more than a half percentage against the euro.

The New Zealand dollar depreciated in the forex market today, capping previous gains made the past few days during global stock rallies. The main reason behind the fall was fresh statistics reported by the New Zealand government, showing figures that surprised both economists and analysts.

Reports showed that consumer prices declined, which was not expected. As a result, the demand for the country’s currency decreased, making it depreciate against several other currencies. The New Zealand dollar depreciated 40 basis points against the U.S. dollar and 50 basis points against the Japanese yen.

The New Zealand Central Bank is on par with its inflation aims, creating space to lower interest rates to further encourage growth. Some speculations are that the country will in fact cut interest rates during the next Central Bank meeting.

Traders and analysts alike have been awaiting this moment for a while, and it has finally arrived: France, along with several other countries, has had their credit ratings downgraded by Standard & Poor’s. The news made the euro plummet and hit a record low in the past 12 months.

Some analysts stress the fact that the news was expected by markets and did not come as a shock at all, the only question was when, not if, these downgrades would be presented. As a result, the euro did hit log awaited low point, but is still trading at a pretty high level. There are voices stating that the euro is far stronger than it deserves to be as the whole region is suffering from a crisis with liquidity problems and that a democratic Union makes it hard to take swift action. These people believe that the euro should be trading at par with the U.S. dollar.

Overall, the weekly loss for the euro was not that bad as the week started with gains against both the U.S. dollar and Japanese yen. The European currency weakened 0.3 percent against both the U.S. currency and Japanese currency.

The euro continued to appreciate today, making it a second day of gains for the European currency. The main reason is the current summits and meetings taking place where European officials, together with the International Monetary Fund, discuss the future of the European region and possibilities do deal with the debt crisis. As the officials meet, the forex market is interpreting it as a sing of possible actions to fight the crisis, which made the euro appreciate.

The positivism increased demand for other financial assets, which sparked a global stock really. As a result, the euro and several other currencies gained while the U.S. dollar and Japanese yen depreciated. The best performing currencies in the forex market were the Australian dollar and New Zealand dollar, both gained mainly on decreased demand for safer assets.

The euro has gained a total of 0.6 percent against the U.S. dollar and 0.2 percent against the Japanese yen in the 2-day period. The Australian dollar appreciated 80 basis points against the U.S. dollar and 90 basis points against the Japanese yen. The New Zealand dollar, todays top performer, gained a full percentage against both the U.S. currency and the Japanese currency.

Both the Australian dollar and New Zealand appreciated today, reaching the highest level the currencies have experienced in over 20 days. The main reason behind the boost for the currencies is an overall increased risk appetite, which sparked gains in stock markets in both Europe and the Asian regions. The two currencies are closely connected to the performance of the global economy, as the world’s largest economies showed solid and growing numbers, the demand for Australian dollars and New Zealand dollars increased.

The Australian dollar is on its five-day winning streak against the U.S. dollar, and the New Zealand dollar is outperforming all major currencies in the forex market today. The Australian currency gained 0.6 percent against both the U.S. dollar and Japanese yen and the New Zealand currency appreciated just under a full percentage against the U.S. dollar and 0.8 percent against the Japanese yen.

Currency analysts are expecting the two currencies to stay strong and keep appreciating the next couple of weeks as more positive news are expected from economies such as the U.S. and China.

Analysts and economists are predicting that the Indian currency will keep on depreciating in the forex market, as it has done the last year. The general market consensus is that the Reserve Bank of India is not taking proper action to keep their currency from falling further in 2012.

Analysts are stating the Indian government has in fact taken measures, just that these measures are aimed at the wrong-end result, decreasing speculative trading of the Indian currency. The Indian rupee has been one of the absolute worst performing currencies in the Asian region, decreasing well over 15 percent against the U.S. dollar.

As a result of a weakening currency and slower growing economy, a lot of investors have sold of rupee held assets, which has made the country witness a very large capital out flow.

European officials recently reported that they would add more money to their collective crisis fund through the International Monetary Fund. As a result, the euro gained and climbed from an almost one-year low point.

The euro gained half a percentage from its low-point against the U.S. dollar as the news hit the forex market. The U.S. dollar depreciated against several other currencies as the added funds to IMF means that investors are prepared to take more risks with investments, thus investing less in the U.S. dollar.

Overall, the euro gained 30 basis points against the U.S. dollar and around 8 basis points against the Japanese yen. Other European currencies performing well was mainly the Swedish krona, which gained over 1.5 percent against the U.S. dollar as the Swedish Riskbank decided to lower interest rates.

Rating agency Moody’s officially announced that Belgium will be downgraded by two levels due to the current European debt crisis. The rating agency stated that the whole euro area still is far from a solution and that Belgium is not looking well in the future. The country’s rating went from Aa1 to Aa3 as of today.

Apart from Moody’s, both Standard and Poor’s and Fitch have raised warnings about Belgium’s future. The country was downgraded one step by Standard and Poor’s about 20 days ago and Fitch has recently announced that Belgium is on a close watch and in line for a downgrade.

Belgium’s main problem is that it still is hard  for their banks to raise capital, as it comes with a high price. Recently, the cost of borrowed capital hit the highest point in over a decade. Furthermore, the country’s economy contracted for the first time in 24 months.

Commodities, mainly Gold, are set for appreciation today as the U.S. dollar is witnessing a slow-down in the forex market. When the U.S. currency falls, demand for safer assets, such as gold, rises.

The U.S. dollar has been on a clear winning streak lately as the U.S. economy is one the most stable economies in the world right now, mainly due to the European debt crisis and the many problems it bares with it. Once this streak slows down, investors are betting that the price of gold and other precious metals will rise.

Gold has already witnessed a 1 percent rise this morning during the London trading session. However, it is a small comeback from the big drop earlier this week. Even though gold is set for a rise, investors believe that the total weekly change will still be a negative number.