It has been that kind of week as traders have been more nervous than usual about making any new bets that could be affected by an announcement of the Federal Reserve on quantitive easing.

The nature of the game has been short term with repeated rallies and dips to the euro and the Australian and New Zealand dollar prices quickly abating. Although the probabilities of additional quantitive easing seem to have been decreasing this seems to have failed to steady traders’ nerves. The unanswerable question this week has been what currencies to buy and what currencies to sell; indeed the answers have become increasingly unclear. As a result trading volumes have been very low and values have been keeping much within their near term ranges.

Iceland continues to prosper since the collapse of its banks. Growth is high as is inflation though this has come down substantially since its peak rate of almost 19% in January 2009. The central bank of Iceland has raised its interest rate to slow down the growth of inflation which is currently down to around 5% though is expected to hit 6.8% in early 2012.

Some analysts think that Iceland could be a model that Europe could emulate in order to deal with its deep seated debt problems. Although Moore’s rating of the Iceland economy is currently BBB, it is experiencing increasing prosperity.

China, which has been heavily investing in euro has expressed that it is confident in the future of the currency. Chinese President Hu told French president Nicolas Sarkozy that he had no concerns regarding the exchange rates between the euro and the CNY. However Hu also said that he hopes that Europe will protect China’s European investments.

Poland has also come under the spotlight. The governor of the central bank Marek Belka has indicated that there is reducing enthusiasm to further raise its interest rates as there is an increasing deterioration in economic growth in the country and inflationary pressures are reducing.