Markets are still tentative and investors are cautious with the prevailing state of uncertainty and jitters in the market.
With the bleak outlook for the state of the global economic recovery and the fragile state of the United States economic progress, the lack of major fundamentals is not helping in guiding investors, as the euro-phoria is not helping at all ease the jitters.
The dollar continued to count its losses today and extended the decline versus its major counterparts as eyes head to Feds Bernanke today. The dollar index is trending lower recording the low of 73.55 and the high of 74.03 and currently trading bearishly around 73.65.
Feds Chairman Ben Bernanke is due to give a speech on the outlook for the U.S. economy at 19:45 GMT in Atlanta Georgia and investors are waiting for any clues and hints for a possible THIRD round of quantitative easing, yet probably the Feds might need deeper signs of slowdown to administer another sedative dosage for the fragile economy.
The euro on the other hand continued to count its blessings and extended the gains versus the dollar. The EUR/USD stretched to the high of 1.4681 from the low of 1.4562 and currently trading bullishly around 1.4656.
We saw the gains bolstered for the common currency with the 0.9% rebound in April retail sales and also German factory orders which was good support for growth into the fourth quarter opposed to growing slowing signals across major economic rivals.
Easing jitters over the Greek crisis continue to be the main pillar as investors see the ECB will go forward with its monetary tightening despite the crisis which so far has EU and IMF blessings and might be poised for a new bailout package.
Sterling also rallied today with the lack of major data from the United Kingdom as the focus shifts to the weak dollar. The GBP/USD continued its upside trend even after the BRC reported a slump in retail sales in May assuring the recovery remains on a rough course.
The pair recorded the high of 1.6470 and a low of 1.6322 and currently trading bullishly around 1.6444.
We can see the market consolidating for now with the absence of data from the U.S. session as the focus remains on Bernanke and whether he will signal the next step for the feds and surely keep the dollar gains at bay and extend the downside move.