Currency Updates:
U.S. Dollar Trading (USD) Stocks and risk assets were sold all day yesterday with the Greece political talks seen doomed to fail and investors waiting on the sidelines waiting the fallout. Traders talk that rating agencies are also reviewing the situation and the impact on European banks and other nations. A lot of US Data tonight will set the next direction for the market. Looking ahead, April Retail Sales forecast at 0.2% vs. 0.8% previously. April CPI forecast 2.3% vs. 2.7% y/y.
The Euro (EUR) the EUR/USD broke 1.2900 at the open in Asia as it looked like there will be no Greece deal over the Weekend and the selling continued overnight as ministers in Europe noted that Greece can leave the EU and that no aid will be coming unless a government is formed. EUR/GBP was big news break below the 0.8000 in multiyear new lows. EUR/USD is grinding lower but very slowly with techs noting 1.2700 the bear’s target.
The Japanese Yen (JPY) the Yen was in demand being bought across the board and was the strongest currency on Monday. USD/JPY fell from a small foray above Y80 in Asia to Y79.70 in the US session before stabilizing in the now familiar Y79.50-Y80 range. EUR/JPY fell another leg to Y102.20 and AUD/JPY broke below Y80 as the selling continued.
The Sterling (GBP) ignored a lot of the EUR/USD selling as the cross broke 0.8000 but the topside was limited while stocks are so weak. The recent Pound rally has surprised some fundamental analysts but the UK is looking the best of the worst lately with its tough budgets and AAA rating. Looking ahead, Q1 German GDP forecast at 0.8% vs. 1.5% previously. March UK Trade Balance forecast at -8.4bn vs. -8.7bn previously.
Australian Dollar (AUD) the AUD/USD broke parity in Asia to little fanfare only falling to 0.9950 overnight with the market very subdued and selling gentle. The outlook is for further losses with many targeting 0.9800 but the oversold US stock market suggest a short squeeze will be on the cards at some point this week. Looking ahead, May RBA Rate Meeting Minutes.
Oil & Gold (XAU) XAU/USD fell sharply on banking concerns with demand for cash high. Support was eventually seen at $1555. OIL/USD continued to be sold off breaking $95 and falling to $93.
