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With the report of April consumer inflation this morning at +0.3%, we now know that April real retail sales declined by -0.2%. This is a true mixed reading. While April declined, the upward revision to March retail sales means that month increased by +1.2% in real terms. Read more
EUR underperformance and USD outperformance was the main show in town once again. EUR-USD extended to a near three-month low of 1.3756. The euro also fell against other currencies, with EUR-JPY logging a two-month low of 139.10, for instance. The last down-leg in the euro was a delayed reaction to weaker than expected preliminary Eurozone Q1 GDP, which didn't initially prompt an FX reaction having been portended by the unexpected contractions in the earlier released national figures out of Italy and Portugal. Read more
USD majors posted narrow ranges during pre-Europe Asian trade. EUR-USD flat-lined around 1.3710-20, as it did for most of Wednesday. USD-JPY saw a brief dip to a low of 101.66 following a much stronger than expected initial estimate of Japanese Q1 GDP of 5.9%, though this was evidently driven by a surge of big ticket consumer purchases ahead of the sales tax hike in April. Read more
The dollar traded sideways through the N.Y. session, with most major dollar pairings mired inside a 25 point trading band. Hotter U.S. PPI gave the greenback a minor boost, though softer yields and equities offset to a degree. EUR-USD held onto the 1.37 handle throughout the session, basing at 1.3705, and peaking at 1.3723. Read more
GBP took a dive following a disappointing labour market report that was quickly backed-up by the BoE May Inflation Report, which unexpectedly left GDP and CPI projections largely unchanged while signalling that there remains no rush to hike interest rates. Read more
The AUD logged a one-month high versus the USD as the Sydney market returned to the nascent bullish theme with the Federal Budget now out the way (the budget was announcement during the evening the day before, and was generally considered near expectations and less austere than some pundits had warned). Read more
N.Y. FX trade on Tuesday saw the dollar mostly higher, despite a retail sales miss, only slightly higher equities, and slightly lower Treasury yields. EUR-USD touched new trend lows of 1.3695, as USD-JPY faltered from recent highs of 102.35, though did manage to hold the 102 handle throughout the session. Read more
Over the last few posts, I’ve noted that in practical application the policy of austerity has been an abject failure. Every country that has implemented these policies -- which involve large cuts in government spending during a slumping economy in the hopes they would lead to a decrease in government debt – have in fact had the exact opposite effect. Read more
The USD remained on a genrally firm footing, led by EUR-USD, which dove to a new one-month low of 1.3711 in the wake of a much weaker than forecast German ZEW confidence reading. The ZEW came in at 33.1 in April, down sharply from 43.2 in March. USD-JPY edged out an 11-day high of 102.36. Read more
USD-JPY edged out an 11-day high amid general yen softness as stock markets rallied in Japan and Asia after U.S. indexes hit record peaks on Monday. The pair made 102.32, and was settled just below here going into the London open. EUR-JPY logged a two-day peak of 140.78. Read more
