KUWAIT, July 17 (KUNA) -- Crucial economic events took place last week, affecting risk appetite in the global markets. Federal Reserve suggested the possibility of further economic stimulus, and Moody's Rating Agency placed the United States under review for a credit rating downgrade, according to an economic report. The Euro opened the week at 1.4265, quickly lost ground and dropped below the 1.4000 as downgrades in the Eurozone drove the single currency to a low of 1.3837, the report, released by National Bank of Kuwait (NBK), showed. Sales in the US slowed down more than forecasted last month, indicating limitations on consumer spending which accounts for 70 percent of the economy. Sales excluding autos, gasoline and building materials, rose 0.1 percent, the smallest gain since July 2010. Wholesale fell more than forecasted in June to 0 percent from an expected 0.1 percent, restrained by the largest decrease in energy prices in two years, the report said. In Eurozone, the International Monetary Fund (IMF) called for a "greater sense of urgency" to address the Greek debt crisis and warned Europe that it was taking too long to repair its banking system in the face of growing risks of contagion. A surge in Italian and Spanish bond yields, and further downgrades of credit ratings of Portugal and Ireland, have raised concerns that the largest Eurozone economies could get dragged into the crisis, it added.

Greece reached a deal with the European Commission last week, giving access to 14 billion euros of EU funds for badly-needed investment in its infrastructure. Hurt by the austerity measures, the Greek economy contracted at an annual pace of 5.5 percent in the first quarter. The Greek government revised down its 2011 growth forecast for this year to 3.9 percent. Separately, Fitch Credit Rating Agency had previously downgraded Greece from B+ to CCC. Italy, the third largest economy in Europe, became the latest victim of the European debt crisis. Escalating worries over Greece's default weighed on Italy last week, whose debt represents 120 percent of Gross Domestic Product. The Italian upper house of parliament has approved a EUR 48 billion austerity budget. The package is aimed at balancing the budget by 2014, the report indicated.

In the United Kingdom, inflation slowed for the first time in three months in the United Kingdom, as weaker consumer spending helped decrease costs for recreational goods, driving the Sterling Pound lower. The Consumer Price Index slowed from 4.5 percent to 4.2 percent, against all expectations. Bank of England Governor Mervyn King repeated his view that inflation should slow toward the BoE's 2 percent target in the next two years. The central bank left its key interest rate at a record low to support the recovery, it said.

Gold reached a record high of USD 1,594.45 an ounce last week, on speculation that debt woes in the US and Europe will escalate, before declining at the end of the week to USD 1,582.55. Gold advanced 11 percent this year after climbing for the past 10 years, the longest run of gains in at least nine decades.

KuwaitThe USDKWD opened at 0.27415 on Sunday morning, the report concluded.