Forex: Monday’s review

Yesterday the yen declined on speculation the Bank of Japan will add to stimulus measures this week to support growth and weaken the nation’s foreign-exchange rates. Japan’s currency slid as speculation European officials may step up efforts to tackle the debt crisis damped demand for haven assets.

The euro fell before German and French officials meet today to discuss ways to contain Europe’s financial turmoil.

Australia’s dollar snapped a six-day drop against the greenback and an index of implied volatility fell.

The euro erased losses against the dollar as German Finance Minister Wolfgang Schaeuble said Germany and France will do “everything necessary” to keep Greece in the shared currency. German Finance Minister Wolfgang Schaeuble met with his newly installed French counterpart, Pierre Moscovici, in Berlin today as European Union leaders prepare for a summit meeting in Brussels on May 23.

EUR/USD: yesterday the pair gain, updated a week’s high.

GBP/USD: yesterday the pair traded in a range $1.5780-$1.5840.

USD/JPY: yesterday the pair rose and touched Friday’s high.

UK data includes inflation data and also the Public Sector Finances at 0830GMT.  If it comes in above 3.0% King's letter will be out at 0930 GMT, but it is only likely to echo the analysis in the May Inflation Report, that while high inflation will persist near term it is still expected to fall back below target further out.  At 1000GMT, the German government gives a briefing on the upcoming EU summit, taking place in Berlin, while at 1040GMT, ECB Vice President Vitor Constancio and Atlanta Fed President Dennis Lockhart take part in a panel debate, in Hong Kong. EMU data in the European afternoon session sees the 1400GMT release of flash consumer morale data. US data starts at 1400GMT with NAR existing home sales data, the Richmond Fed Manufacturing Index and also BLS Mass Layoffs data.