Markets continue to trade with high volatility, with the jitters seen across equity and FOREX markets as cautious movements mark the day with shy gains and mixed losses!
The debt crisis remains a major debate in the market, especially with the lack of major fundamentals from the continent, where the dollar remained firm in the market and majors where affected by their own demons today opposed to a general wide sentiment.
We can see actually that the sentiment in general is cautious but not pessimistic after strong Chinese trade figures showed health global demand and expansion, while earnings lifted equities in Europe higher and signal a green U.S. open.
The dollar index maintained its strength, especially as majors weakened and the focus is now on growth which is steady recovering in the U.S. opposed to the focus on rate bets which kept the gains afloat. The dollar index is trading bullishly over intraday basis and now hovering around 74.78 above lows of 74.57 and below the high of 74.99.
As for the euro, the currency is still pressured by the resurfacing debt crisis and debt-laden Greece and its struggle to meet its budget target. The euro rose off lows versus the dollar at 1.4269 and hovering now around 1.4334 after Reuters said Greece denied reports that it is in talks for any new aid package.
The successful 1.625 billion euros of treasury bills sales from Greece at the same cost as the previous auction and above the target of 1.25 billion euro also eased the woes in the market slightly over default or restructuring.
As for sterling, the currency remains weak and trending lower against the dollar one day before the May Inflation Report which investors expect to include downside revisions to growth expectations by the BoE. The GBP/USD is trading bearishly and continues the trip south now hovering around 1.6330 down from the high of 1.6419 and above the low of 1.6323.
The easing fears and rising equities on positive earnings supported the dollar to also retain its gains versus the Japanese yen for now, especially as investors are jittery over possible intervention again from the BoJ to weaken the yen as it trades around the critical 80 threshold. The pair moved higher to the high of 80.78 and now around 80.60 off lows at 80.14.
More volatility is expected to be seen with the opening of the U.S market as the lack of major data will keep the speculation and the sentiment the dominant players in the equation.