Forex: Monday’s review
05.06.2012, 07:36

Forex: Monday’s review

 

Yesterday the euro rose for a second day versus the dollar as traders said the shared currency’s decline may have been too quick after European leaders agreed to discuss closer banking cooperation in the euro bloc. European Commission President Jose Barroso and German Chancellor Angela Merkel agreed to discuss proposals on banking coordination when they meet in Berlin.

The commission, the European Union’s executive, last week called for a “banking union” that would integrate supervision of lenders more tightly and create a pool of EU funds to clean up banks with cross-border exposure. The Brussels-based commission also proposed that the euro’s permanent bailout fund inject cash to banks instead of channeling the money through national governments.

The dollar strengthened against the yen as Treasury yields rose for the first time in four days, from record lows.  The dollar snapped a three-day drop against the yen after Japanese Finance Minister Jun Azumi pledged on June 1 to take “decisive action” on his nation’s currency should “excessive moves” persist. Azumi declined to comment on whether Japan has intervened in the currency market at a news conference.


EUR/USD: yesterday the pair gain to $1.2500.

GBP/USD: yesterday the pair traded in a range $1.5340-$1.5400.

USD/JPY: yesterday the pair traded  in range Y78.00-Y78.40.


UK markets remain closed Tuesday, which will likely help dampen trading volumes in Europe. However, there is a raft of European data, starting with the release of PMI service sector data.  At 0715 GMT, Spanish data is released, followed by Italy at 0745GMT, France at 0750GMT, Germany at 0755GMT and EMU final service PMI data at 0800GMT. At 0900GMT, the EMU April retail trade data is released, followed at 1000GMT, German April manufacturing orders data is released. The US calendar starts at 1255GMT, the Johnson-Redbook weekly store sales numbers hit the screens. The Bank of  Canada rate announcement is due at 1300GMT, with consensus on unchanged rates/policy. At 1400GMT, the U.S. ISM monthly non-manufacturing index.  At 2100GMT, Dallas Federal Reserve President Richard Fisher will speak on "The Limits of the Powers of Central Banks" in Scotland, while Chicago Federal Reserve Bank Charles Evans speaks to the NYU Money Marketeers, in New York at 2315GMT, and will answer questions from the audience and the media.

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