Dollar attempted to strengthen earlier today but lacks following buying to break out of recent range. On the other hand, the greenback is feeling heavy against Yen as treasury yield dives as much lower than expected CPI reading dampens speculation that Fed might exit from the current policy soon. On the other hand, Fed is expected to purchase debt for a second time this week and it's believed that FOMC members will use next week's policy statement to suppress any rate hike speculations. Yield on 10 year note opens falls further to as low as 3.618% today, which is well below last week's high of 4.014%. It looks like the greenback will continue to engage in sideway trading for a while.
Headline CPI in US dropped much more than expected by -1.3% yoy in May, the biggest fall since 1950, versus expectation of -0.9%. Core CPI moderated from 1.9% yoy to 1.8% yoy, inline with consensus. Current account deficit narrowed to -101.6B in Q1. Canadian wholesale sales dropped -0.6% mom in April, leading indicators dropped -0.1% mom in May. Eurozone trade deficit narrowed to -0.3B in Apr. Swiss ZEW economic expectations improved markedly to 9.7 in Jun.
Sterling was noticeably one of the weakest currency today. BoE minutes released today showed policy makes voted unanimously to continue the asset-purchase program. Ht minutes also noted that 'the risk of a continued sharp contraction in output in the near-term had receded somewhat' while 'The news over the month had been mostly encouraging. Conditions in financial markets had continued to improve'. However, that's obviously not enough to provide any optimism to investors. Claimant count rose less than expected by 39.3k in May while ILO unemployment rate also rose less than expected to 7.2% in April. But after all, sterling weakens sharply against dollar and euro in European session.