EU Morning Report- Focus shifts to the ECB monetary policy meeting

The US dollar (USD) weakened against a basket of currencies on an improved sentiment in the market. Versus the safe haven Japanese yen (JPY), the greenback jumped to 78.94 from 78.10 as investors remain cautious that the Bank of Japan may step in the markets to weaken the yen. Focus now turns to the Group of Seven Industrialized Nations conference call where they will discuss developments in the eurozone.

The Australian dollar (AUD) rallied against the greenback to 0.9862 from 0.9710 following the release of the first quarter Gross Domestic Product figures. GDP surprised the markets by showing a 1.3% expansion of the Australian economy while economists expected 0.5% raising speculation there will be no need for further easing of its monetary policy.   Yesterday, RBA cut its main cash rate by 25 basis points to 3.5% but the move was less aggressive as investors were expecting a 50 basis points cut.

Oil edged higher to 85.02 dollars a barrel from 83.31. Gold (XAU) jumped to 1628.71 dollars an ounce from 1611.72 and against the euro it rose to 1298.64 from 1295.30 Silver (XAG) edged higher to 28.85 dollars an ounce from 28.10. Stay in tune throughout the day with foreign exchange bullets!