FX Highlights

  • USD is trading higher supported by Friday's release of better than expected nonfarm payrolls, rising US bond yields, weaker equity markets and speculation that the Fed will raise interest rates by the end of 2009
  • USD experienced limited short-term selling pressure in reaction to a statement from the IMF that USD could be replaced as the world reserve currency, GBP was pressured by continuing political jitters in the UK, UK Labor Party headed for big losses, EUR pressured by downgrade of Irelands debt rating
  • IMF's Lipsky says there's a strong possibility of the development of a new reserve currency to replace USD
  • Japan's April current account surplus falls 54.5% y/y, May M2 money supply rises 2.7%, May corporate bankruptcies fall 9.5%, JPY higher
  • BOE' s Blanchflower says that UK economy will not grow until second-half of 2010, UK house prices may continue to fall and the BOE may need to increase asset purchases, UK political turmoil continues amid pressure for UK PM Brown to resign, Labors share of UK vote lowest in a century, GBP lower
  • EU June SENTIX improves to a nine-month high of -27 from -34.3 last month, German April industrial orders were unchanged, German economics minister says latest data suggests German economy has stabilized, EUR lower
  • S&P lowers Ireland's rating to AA and outlook to negative
  • Swiss May unemployment rate rises to 3.5% compared to 3.4%last month, CHF lower
  • Top China banker calls for US sale of yuan bonds
  • US equity markets set to open lower, European equities 2% lower, Nikkei closed 98 points higher

Upcoming Events

  • CAN-Monday, May housing starts will be released expected at 130K compared to 117K last month