The US dollar (USD) appears weak as markets open ahead of no economic data release expected today, in observance of the Memorial Day bank holiday. The ADP employment report on Thursday and Non Farm Payrolls release on Friday will be the points of attention for market participants for this week.

The Australian dollar (AUD) set off the weak on the right foot against the US dollar, with a strong rise following days of seemingly uninterrupted drop. Retails Sales on Wednesday and Building Approvals on Thursday will provide the catalysts needed for the pair to move towards new ground.

Oil opened at 90.96 dollars a barrel from 90.75. Gold (XAU) opened at 1573.97 US dollars an ounce from 1556.34. Against the euro, gold rose to 1256.65 from 1244.16 an ounce. Silver (XAG) opened at 28.6130 dollars an ounce from 28.4975. Stay in tune throughout the day with foreign exchange bulltes!

Written by Easy-Forex

EU Morning Report – Euro’s payback time? is an article from:

The US dollar (USD) appears weak as markets open ahead of no economic data release expected today, in observance of the Memorial Day bank holiday. The ADP employment report on Thursday and Non Farm Payrolls release on Friday will be the points of attention for market participants for this week.

The Australian dollar (AUD) set off the weak on the right foot against the US dollar, with a strong rise following days of seemingly uninterrupted drop. Retails Sales on Wednesday and Building Approvals on Thursday will provide the catalysts needed for the pair to move towards new ground.

Oil opened at 90.96 dollars a barrel from 90.75. Gold (XAU) opened at 1573.97 US dollars an ounce from 1556.34. Against the euro, gold rose to 1256.65 from 1244.16 an ounce. Silver (XAG) opened at 28.6130 dollars an ounce from 28.4975. Stay in tune throughout the day with foreign exchange bulltes!

Written by Easy-Forex

EU Morning Report – Euro’s payback time? is an article from:

The Euro was subjected to further heavy selling pressure in Europe on Thursday with weaker than expected economic data triggering renewed downward pressure. The German manufacturing PMI index fell to a three-year low of 45.0 from 46.6 previously which contributed to an overall Euro-zone flash reading of 45.0 from 45.9 in April. Although the German services sector held firm above the 50 benchmark, the overall Euro reading fell to 46.5 from 46.9

The German IFO index weakened to a six-month low of 106.9 from 109.9 as it was unable to sustain the run of better than expected releases. The economic data reinforced pessimism surrounding the Euro-zone economy and also increased pressure for further ECB policy action. There were rumours that the bank would look to cut interest rates at the June council meeting.

As risk appetite also remained weak, the Euro dipped to lows near 1.2520 before correcting strongly back to the 1.26 region with buying triggered in part by gains against the Swiss franc. There was also renewed speculation over a fresh LTRO operation which helped underpin equity markets. ECB President Draghi called for the EU to take a courageous leap of political faith.

The latest US jobless claims edged marginally lower to 370,000 from 372,000 previously. There was a 0.2% gain in durable goods orders for Aril while core orders recorded a second successive decline with a 0.6% drop. This was significantly weaker than expected and will reinforce doubts over investment trends. The debut US PMI manufacturing index from market recorded a decline to 53.9 from 56.0 previously. Fed Governor Dudley was slightly more optimistic surrounding the US economy, but repeated that further action would be taken if required.

The Euro was unable to break back above the 1.2620 area against the dollar and weakened back to 2-year lows in the 1.2520 region with significant selling even though risk conditions were slightly more stable and it remained weak on Friday.

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Yen

After stalling in the 79.50 area, the dollar dipped to lows around 79.35 against the yen following the weaker than expected US data releases. There was little follow-through yen buying and the US currency was able to regain some ground later in New York.

There was some easing of defensive demand for the US dollar during the New York session which allowed US Treasury yields to rise and also underpin the US currency.

National core consumer prices rose 0.2% in the year to April, but Tokyo deflation intensified in May with a reading of -0.8% which will maintain pressure on the Bank of Japan to take additional policy action to combat deflation. The dollar was able to move towards the 79.80 region in Asia on Friday.

Sterling

The first-quarter UK GDP data was revised to a figure of -0.3% from an original estimate of -0.2% which further undermined confidence in the economic outlook as construction activity was revised even weaker.

A stronger US currency following the weak Euro-zone data did more damage to Sterling than the domestic data and it retreated to twice test lows just below 1.5650 against the US currency after being blocked above 1.57.

The weaker than expected data increased speculation that the Bank of England would move towards additional quantitative easing within the next two months. Safe-haven considerations were still important as UK benchmark gilt yields dipped to fresh record lows before correcting slightly higher. There will be the potential for further defensive flows into Sterling, but here will also be fears over the serious negative impact on the UK economy if the Euro-zone deteriorates further.

Swiss franc

After weeks of extremely narrow trading ranges and reports of heavy National Bank intervention to defend the 1.20 minimum level, the Euro moved sharply higher on Thursday. After initial speculation over intervention, the move was attributed to rumours that a deposit tax would be levied to discourage speculative inflows into Swiss assets.

The Euro pushed to a high above 1.2050, but there was no follow-through buying and it retreated back to the 1.2020 area later in the US session. Although the dollar was blocked in the 0.9590 area against the franc, it held the bulk of gains.

There will still be expectations of defensive inflows into the Swiss currency given persistent fears surrounding the Euro-zone outlook.

Source: VantagePoint Intermarket Analysis Software

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Australian dollar

After finding support on dips towards 0.9720, the Australian dollar rallied during the early New York session with a peak close to 0.98. Volatility remained high and there was a further test of the 0.9720 area as the Euro was subjected to renewed selling pressure.

There were further concerns surrounding the Asian economy with Chinese officials reporting that bank lending was weakening and there was a very cautious tone surrounding the outlook. In this context, the Australian currency was unable to gain any significant traction.

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US Jobless Claims Edged Marginally Lower is an article from:

Equities	EUROPE				US				ASIA3
	FTSE 100	1.59%			S&P 500	0.14%			NIKKEI	0.01%
	DAX	0.48%			DJIA	0.27%			HIS	-0.26%	▼
	CAC	1.16%			NASDAQ	-0.38%	▼		CSI 300	-0.34%	▼

Written by Easy-Forex

EU Morning Report- Euro remains under pressure is an article from:

The Euro was subjected to renewed selling pressure in Europe on Wednesday with a re-test of 2012 lows below 1.2640. The Greek situation inevitably remained an important focus as tensions remained higher following former Greek Prime Minister Papademos’ comments that a Euro exit was a real risk. There were further reports that key institutions were making contingency plans for the Greek exit and the barrage of rhetoric continued as the Bundesbank stated that a Greek exit was manageable.

The German 2-year bond auction recorded a yield decline to 0.07% from 0.14% previously, a fresh record low for yields with investor demand holding firm. There were further fears surrounding capital outflows from weaker Euro-zone countries on contagion fears and an uncontrolled Greek exit which continued to undermine the Euro.

Selling pressure intensified during the New York session with the Euro dipping to below the 1.26 level for the first time since August 2010 with lows just below 1.2550. There was also evidence of increased stresses within the inter-bank lending markets as it became more expensive to secure dollars. There was also wider dollar demand as emerging-market currencies generally remained under pressure. US new home sales increased to an annual rate of 343,000 from a revised 332,000 previously which did not have a major impact with market attention focussed elsewhere.

Late in the US session, there were some reports that EU leaders could move towards a deposit-guarantee scheme for banks which provided some relief to sentiment and the Euro moved back to the 1.2580 region. There will also be speculation that global central banks will look to alleviate funding stresses which would provide a brief lift to risk appetite. EU Leaders did not announce any significant initiatives at the Summit as Germany remained opposed to Eurobonds and the Euro was unable to gain any sustained relief.

Source: VantagePoint Intermarket Analysis Software

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Yen

The yen continued to draw defensive demand during the European session with particular demand against the Euro. As stop-loss levels were broken, the dollar dipped to lows near 79.20 while there was a Euro slide to below the 100 level for the first time since January.

The yen continued to gain support from a deterioration in risk appetite despite an important lack of confidence in the Japanese economic fundamentals. Bank of Japan Governor Shirakawa was also cautious over the potential for further monetary easing.

Risk conditions remained extremely cautious on Thursday with no support from the China HSBC manufacturing PMI index which recorded the 7^th successive figure below the 50 benchmark level and the dollar consolidated near 79.50.

Sterling

A stronger dollar put Sterling on the defensive during European trading on Wednesday and it dipped to lows below 1.57.

The Bank of England minutes recorded a unanimous vote to hold interest rates at 0.50% while there was an 8-1 vote to keep quantitative easing on hold with Miles voting for additional action. Several members did, however, state that the case for additional bond purchases was very close. These comments, allied with a decline in growth forecasts, reinforced speculation that the bank would move to additional measures in June.

The retail sales report was sharply weaker than expected with a 2.3% monthly decline for April, the weakest report for over two years as sales retreated from an artificial boost in March. Underlying vulnerability was illustrated by a 1.1% annual fall as incomes remained under pressure. The latest CBI industrial orders index also weakened to -17 from -8 the previous month.

Sterling found support in the 1.5680 region with further selling pressure alleviated by demand against the Euro as there was a test of the pivotal 0.80 level.

Swiss franc

The dollar initially dipped back towards the 0.9480 area against the franc on Wednesday before finding strong buying support with fresh 2012 highs around 0.9570 during the New York session as the franc remained firmly tied to the Euro.

Safe-haven considerations inevitably remained very important during the day as the Euro stayed under pressure. There was further speculation over capital flight from the Euro area, especially with reports of capital flows from the peripheral economies. The inability to forge any fresh Euro-zone solution maintained upward pressure on the franc.

Source: VantagePoint Intermarket Analysis Software

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Australian dollar

The Australian dollar was subjected to heavy selling pressure during the European session on Wednesday with an initial test of support near 0.9730. After a temporary respite, there was intense selling which pushed the currency to 2012 lows below 0.97 before a tentative recovery.

The currency was again undermined by a deterioration in risk appetite as confidence in the global growth outlook continued to deteriorate. The currency continued to recover from over-sold conditions in Asia on Thursday, but there was no significant support from the Asian economic data or general tone surrounding risk appetite.

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Selling Pressure Intensified is an article from: