After a surprise run up to highs over 1.2400 in New York, the Euro was unable to keep those lofty levels in its grasp in Asia, as the pair shed over a big figure on continued investor uncertainty in the Euro Zone. After rampant speculation earlier that the ECB could potentially intervene in the currency markets in order to aid the wounded monetary unit helped boost it higher, EU member Juncker quashed that suggestion by stating the ECB saw no need for such action. The consequent moves in the EUR/USD brought it from 1.2430 highs to lows that dipped below the 1.2320 level.

The yen crosses drifted lower as well with the subtle stench of risk aversion rising with news that investigation results in South Korea proved that North Korea used a torpedo to sink a South Korean warship back in March. While South Korea vowed stern action, North Korea retorted with denials and threats of all out war in response to any punitive measures. EUR/JPY dropped below 113.00, GBP/JPY saw 131.20 lows, and AUD/JPY saw the 76.00 big figure. Meanwhile, poor GDP data out of Japan did little to disrupt the USD/JPY as it remained in a consolidating pattern between 91.85 and 91.50.

The Australian dollar was sold along the risk theme, dipping below 0.8300 after earlier highs that were just shy of 0.8500. The month of May has been unkind to the AUD/USD as it has lost over ten big figures since April. Conversely, Australia's neighbor, New Zealand, enjoyed a strong showing in its currency after the annual budget release showed plans to lower foreign debt. The NZD/USD breached 0.6875 on the upside before a late day drop to the tune of 100 pips. AUD/NZD saw a violent move lower from 1.2500 to 1.2300 over the course of the day.

While the data looks on the light side ahead in London, be weary of continued volatility based on news and comments out of Europe.

Upcoming Economic Data Releases (London Session) prior expected

5/20/2010

6:00

GE

Producer Prices (MoM)

APR

0.70%

0.60%

5/20/2010

6:00

GE

Producer Prices (YoY)

APR

-1.50%

0.40%

5/20/2010

7:30

GE

Merkel, Schaeuble Host Pre-G-20 Meeting in Berlin

20-May

 
 

5/20/2010

8:30

UK

Retail Sales Ex Auto Fuel(MoM)

APR

0.20%

-0.10%

5/20/2010

8:30

UK

Retail Sales Ex Auto Fuel(YoY)

APR

4.00%

3.20%

5/20/2010

8:30

UK

Retail Sales w/Auto Fuel (MoM)

APR

0.40%

0.20%

5/20/2010

8:30

UK

Retail Sales w/Auto Fuel (YoY)

APR

2.20%

1.80%