Forex Analysis

FX Daily

Market movers today • We will continue to scrutinise Fed speeches for signs of an imminent scale down of Fed’s asset purchases.

USD/JPY Analysis

Release of weaker than forecast US ISM data Monday provided the catalyst for triggering the move below Y100.00,

GBP/USD Analysis

The pair closed in NY at $1.5322 after rate had spiked to a high of $1.5376 following the release of weaker than forecast US ISM data

EUR/USD Analysis

The pair closed in NY at $1.3077 after rate had seen a sharp recovery boost to $1.3108 following the release of weaker than forecast US ISM data,

When Doves Cry

• Govt. finances flattered by corporate tax and timings • BNZ Confidence Survey hits record high

USDJPY dumps through 100 on ugly US data

The squeeze on the JPY shorts is on after a very ugly US ISM Manufacturing report (49.0 vs. 51.0 expected and 50.7 last month,

Euro area: Expect less drag from fiscal policy

Tight fiscal policy by way of spending cuts and tax increases is one of the key reasons why the Euro area struggles to get out of recession.

US Morning Update

Major overnight headlines: •Norway’s may manufacturing PMI at 52.0 •ECB says banks deposited eu85.6 bln with it overnight

Mid-Day FX Market Analysis

USD: The Dollar is finding moderate pressure at the start of the new trading week, although it survived an early retest of last Thursday’s downside breakout lows.

Both Czech and Polish PMI better than expected Hungarian yields continue to rise On Friday, the zloty and the koruna barely changed while the Hungarian forint and government bonds remained under pressure.

FX Morning Rundown

Asian bourses were mixed overnight with the Nikkei leading losses (unofficially closes down 3.72% at 13,261.82)

“Carry” currencies – The Double Whammy

• The Emerging Market and commodity currencies (“carry” currencies) have depreciated against USD and EUR in May, in particular AUD and ZAR have been hit.