The US dollar gained ground against the yen and remained close to recent ranges against the euro as better-than-expected U.S. jobless claims and durables data released. The number of new laid-off workers filing claims for state unemployment benefits fell -13K to 623K last week, while continuing claims rose by 110,000 to a record 6,788,000. Durable goods orders unexpectedly rose in April, up 1.9 percent.
Look for the dollar to hold its ground against the yen, but remain under pressure against most of its counterparts with renewed risk appetite in the market holding.
The euro gained momentum against the dollar, but remained close to recent ranges after the release of better-than-expected data on U.S. jobless claims and durable goods. Look for the single European currency to remain range bound between 1.37-1.40.
Sterling weakened against both its US and European counterparts due to profit taking on technical moves and after the release of the Confederation of British Industry's survey declined to -17 vs 3 in last month. In other news, outgoing BOE Monetary Policy Committee member David Blanchflower, stated the world should not assume that the worst of the global economic crisis is over. Look for sterling to continue to push higher as concern over the UK economy diminishes.
The Japanese yen weakened across the board on the release of stronger US data coupled with Moody's affirming the United States ' triple-A rating. In other news, Japan 's Nikkei 225 closed 0.1% higher and the broader Topix added 0.3%. Look for this trend to continue in the near term as USD/JPY tries to hold above 97.
The Canadian dollar remained well supported against the greenback boosted by a jump in equity markets coupled with a rise in oil prices. The price of oil neared $64 a barrel, helping to prop up the Canadian dollar. Look for the Canadian dollar to remain well supported as it continues to track higher commodity prices coupled with renewed risk appetite.
The Australian dollar weakened against the dollar and kiwi after the release of New Zealand 's budget. Losses, however were capped as Japanese investors came in to buy the currency. Look for the Aussie to remain close to recent ranges despite the concern over the countries recession the first quarter with renewed risk sentiment in the market.
The New Zealand dollar strengthened across the board reaching its highest level since last October against the dollar after Standard & Poor's agency lifted the outlook for the country's rating to stable from negative and reaffirmed its AA-plus rating following the government's annual budget. The budget, which forecast annual deficits for up to 10 years, included scrapping planned tax cuts and deferring investments to the state pension fund.
The Mexican peso strengthened after the release of better-than-expected US government data indicated that the recession in the US is slowing. With Mexico 's economy strongly tied to the US , look for any additional sign of recovery to support the peso.
10-Year Treasury Note Yield : 3.568%
Dow Jones Industrial Average : 8,451.91 -21.98