The euro (EUR) edged higher to 1.2824 rebounding from 1.2724 against the US dollar on hopes that EU leaders will agree on steps to fight the debt crisis in Europe. Investors expect the French President Francois Hollande to suggest joint eurozone bonds at the EU meeting in Brussels on May 23. The idea of joint bonds can help with funding difficulties for some heavily-indebted eurozone countries but that policy has been rejected by Germany before. EU leaders are also expected to focus more on growth and ways to help Greece stay in the euro. The single currency remains under pressure as the market is worried about Spain’s growing financial problems as well as developments in Greece ahead of a repeat election in June.
The US dollar (USD) stumbles against a basket of currencies on an improved sentiment in the market. Versus the safe haven Japanese yen (JPY), the greenback rose to 79.47 from 79.12. Investors are now focusing on the Bank of Japan’s two-day policy meeting starting on Tuesday and the question is whether BoJ will decide for additional easing. Attention is now on the US Existing Home Sales and the Fed Manufacturing Index and investors will be closely watching for any signs of US economic growth.
The British pound (GBP) edged higher against the greenback rising to 1.5841 from 1.5779. The UK economy remains vulnerable to the eurozone deepening problems while it suffers from a slow growth and a stubbornly high inflation Sterling weakened following last week’s Bank of England inflation report which downgraded growth forecasts raising expectations about further quantitative easing. All eyes now turn to today’s inflation from the UK which is expected to increase to 0.6%.
Oil rose to 93.32 dollars a barrel from 90.89. Gold (XAU) edged lower to 1584.62 dollars an ounce from 1599.28 and against the euro it fell to 1242.81 from 1247.45 Silver (XAG) dropped to 28.05 dollars an ounce from 28.79. Stay in tune throughout the day with foreign exchange bullets!
|EURUSD||1.2760||LONG @ 1.2760||56% of deals buy EUR|
|USDJPY||79.50||SHORT @ 79.50||80% of deals buy USD|
|GBPUSD||1.5775||LONG @ 1.5775||66% of deals buy GBP|
|AUDUSD||0.9845||LONG @ 0.9845||72% of deals buy AUD|
|GOLD||1579.00||LONG @ 1579.00||70% of deals buy GOLD|
|OIL||92.00||LONG @ 92.00||55% of deals buy OIL|
|GBP||08:30||Consumer Price Index||0.6%|
|EUR||14:00||Existing Home Sales||4.6M|
|EUR||14:00||Fed Manufacturing Index||12|
|FTSE 100||0.70%||S&P 500||1.60%||NIKKEI||1.04%|
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