General Commentary
Greece helps drive markets lower
Last week’s currency trading review
The Dollar was bid for most of the week as markets around the world extended losses on the back of uncertainty from Greek elections. Adding to the dollar buying were downgrades of European banks by ratings agencies. April Industrial production rose 1.1% from -0.6% previously. The Euro plunged to 4 month lows below 1.2700 as negativity surrounding possible second elections for Greece weighed on the currency. News of deposits being withdrawn from European banks did not help sentiment. The EUR/USD lost 1.15% closing at 1.2779, after opening the week at 1.2928.
The Japanese Yen continued to strengthen as safe haven flows prompted USD/JPY to fall in light of Eurozone issues. In the absence of any direct intervention in the markets, the pair has moved below 80 yen without major resistance. The USD/JPY fell 1.16% closing at 79.00 vs. 79.93 opening for the week. The GBP was a noted underperformer with the Bank of England inflation report suggesting more QE was very possible going forward. GBP/USD was notably weaker for the week. The GBP/USD lost 1.56% closing at 1.5828 after opening at 1.6078. The AUD was hit particularly hard as the risk sensitive currency suffered from issues abroad and softening sentiment locally. The RBA meeting minutes echoed this sentiment paving the way for possible further rate cuts. The AUD/USD gave up 2.06% closing at 0.9845 after opening at 1.0052.
The Forex Trading Week Preview
In the States; On Tuesday, Existing Home sales forecast at 2.9% vs. -2.6% previously m/m. On Thursday, April Durable Goods forecast at 0.70% vs. -4.00% previously. Also, Initial Jobless claims with previous at 370k new claims. On Friday, University of Michigan Confidence survey forecast at 77.8 vs. 77.8 previously. We will provide our previews and reviews of these data releases in the daily summary.
In the Eurozone; On Tuesday, EZ Consumer confidence forecast at -20.1 vs. -19.9 previously. On Thursday, Q1 GDP for Germany is forecast unchanged at 0.50% q/q. Also on Thursday, PMI Manufacturing and Services forecast of 47.0 and 52.0 respectively compared to previous readings of 46.2 and 52.2 respectively. German IFO is released later in the European morning with expectations component forecast at 102.0 vs. 102.7 previously. In the UK, On Tuesday, April CPI is forecast at 3.10% vs. 3.50% previously. On Wednesday, BoE minutes are due. On Thursday, Q1 GDP forecast at -0.20% vs. -0.20% previously q/q. We will provide our previews and reviews of these data releases in the daily summary.
In Japan; On Wednesday, BOJ Meeting Forecast to hold at 0.1% but with a chance of extra measures to support the economy and weaken the Yen. On Thursday, National CPI forecast at 0.40% vs. 0.50% previously. In Australia; In what is a light data week, no releases are due. We will provide our previews and reviews of these data releases in the daily summary.
