Forex News

GBP-USD has established a key pivot at 1.6059. Above that level a bull case remains alive whilst below it the market should accelerate lower. USD-JPY is increasingly vulnerable to a downside reversal. Leadership remains defensive in stock markets and 1346 remains the crucial crossroads in the S&P 500.

European sovereign debt contagion risk and fear of Greek default hit risk sentiment as well as the Asian emerging market currencies and the South Korean Won has been one of the worst performers over the month among the 10 most actively traded Asian currencies.

EUR USD (1.4160) Those searching for the reason for the euro’s sudden spike in overnight trading probably needn’t look any further than a headline in this morning’s Financial Times – ‘China to buy Europe bail-out bond’.

G10 Currencies EUR: This morning during Asian trading hours a press release caused EUR-USD to recover notably. Klaus Regling, CEO of the EFSF, announced that the regime in Beijing was interested in investing into the new tranche of EFSF bonds which would have to be issued in the near future to finance aid payments to […]

News CZ: Neutral – Govt auctions CZK 6.196bn VAR/16 CZGB, bid/cover ratio – 2.51 / Govt approves new pension reform legislation (p2) TK: Dovish – CBT leaves both policy Rate and RRR unchanged (p2)

USD/CHF is stalling at its downtrend, GBP/USD is bouncing from Fibo support circa 1.6054 and USD/JPY remains capped by its 55 day ma at 82.55. The dollar is drifting lower as a consequence.

A quiet NY session drifted into Asia and looked to be fairly slow moving at first.  A FT newspaper article, (http://www.ft.com/intl/cms/s/0/0033bc70-86eb-11e0-92df-00144feabdc0.html#axzz1NPHz6zn3) helped Euro stay bid as it stated China would buy into the European bonds to be issued next month to help fund the Portuguese bailout. 

Theme of the day is risk aversion pause. EURUSD continuing its slowly rising correction, look for renewed selling opportunity.

Two weeks before the decisive June ECB meeting a host of Board members will get a chance to influence market expectations about the next rate hike. Better liquidity prospects and lingering fears about Greece could add to the re-steepening in coming days, offering better entry into flatteners before the ECB pre-announces the next rate hike […]

As universally expected, CBRT kept its policy rate at 6.25% in today’s meeting. Required reserve ratios (RRR) were also left unchanged. Market expectations were mixed, with some analysts, including ourselves, expecting another small upwards adjustment.

UK Q1 GDP (2nd release) – UK consumer back in recession Market rumours prior to this mornings GDP release were for a soft number, and although the headline growth rate was unchanged at 0.5% q-o-q (1.8% y-o-y) the detail was undoubtedly weak.