USD
The US dollar had some trouble sustaining its gains recently, despite stronger than expected data from the US.
This may have been a result of an improvement in risk sentiment, which helped lift the higher-yielding currencies against the Greenback. The CB consumer confidence figure posted another record high, as it climbed from 74.3 to 81.4, higher than the estimated 75.2 reading. Meanwhile, new home sales improved from 466K to 476K, higher than the consensus at 462K. Durable goods orders were up by 3.6% and the core version of the report printed a 0.7% uptick instead of staying flat for the month. Today, only the US final GDP figure for the first quarter of the year is set for release, and no revisions are expected from the 2.4% reading.
EUR
The euro was barely able to benefit from ECB head Draghi’s speech, as the central bank governor focused on the existing challenges in the euro zone region. German GfK consumer confidence data is on tap for today and a small improvement from 6.5 to 6.6 is expected. A weaker than expected reading could push EUR/USD deeper below the 1.3100 major psychological level.
GBP
Cable managed to keep its head above the 1.5400 mark in yesterday’s trading, as UK data didn’t disappoint. BBA mortgage approvals rose by 36.1K while the CBI realized sales climbed from -11 to 1, as expected. The events on today’s schedule include BOE Governor King’s speech, the BOE financial stability review, and the government spending review. Given the recent improvement in public sector borrowing, upbeat remarks could be in the cards. If that’s the case, the pound could have a chance at holding on to its recent gains.
CHF
There have been no major reports on Switzerland’s calendar recently, which explains why USD/CHF has been slowly climbing up the charts. The UBS consumption indicator has just been released and it showed an improvement from 1.43 to 1.46, revealing that consumer-based indicators were better in May. No other reports are due from Switzerland today.
JPY
The Japanese yen rebounded against most of its major counterparts recently, as USD/JPY tested 97.00 while EUR/JPY found resistance around 128.00. There have been no major releases from Japan over the past 24 hours and none are due for the next trading sessions, suggesting that yen pairs could move to the tune of risk sentiment.
Commodity Currencies (AUD, NZD, CAD)
The Australian dollar and New Zealand dollar recovered slightly against the Greenback yesterday when the People’s Bank of China tried to reassure markets that a credit crunch won’t take place in China. AUD/USD climbed to the 0.9300 area while NZD/USD held on to the .7750 mark. As for USD/CAD, the pair continued to rally to the 1.0500 mark. No reports are due from the comdoll economies, other than the New Zealand trade balance in the next Asian session.
By Kate Curtis from Trader’s Way
