The euro is marginally higher despite facing an earlier threat in the shape of more financial aid for Greece following that country's fourth ratings downgrade in 13 months. The dollar continues to take back ground this morning stolen from it at times of growing risk aversion, while the Canadian dollar overlooks a decline in the price of crude oil as the economy warms in its newfound political stability for the first time in seven years.

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Euro - The euro today repeated Monday's feat of trading below $1.4300 for only the second time since April 19 after Greek daily Kathimerini said that the IMF was on the verge of a second financial aid package worth between €80-100 billion. Monday's S&P downgrade of the long-term standing of Greek government debt leaves the nation second only to Belarus in terms of rankings at the bottom of the dumpster. With no scheduled economic data to focus on, dealers tested the downside for the euro before showing willingness to step in and buy the single unit. In early morning New York trading the euro had erased losses to trade at an unchanged price against the dollar at $1.4357.

U.S. Dollar - The dollar index gained Tuesday advancing against the Japanese yen and Swiss franc while holding its own against the euro. Weaker than forecast inflation data in Switzerland toppled its running streak of gains as interest rate bets were pared by traders. The dollar faces a light schedule of data early in the week with import price for April due to gain by 10.4% year-on-year while an IBD index of economic optimism is due to improve by one point to 41.8. The dollar index stands at 74.61 ahead of this morning's data.

Japanese yen - With a commodity rebound and rising confidence in the health of corporate earnings, dealers see little incremental benefit in holding on to the Japanese yen at present. Rising confidence traditionally harms lower yielding safe havens and today the yen has eased to ¥80.63 against the dollar. The Asian unit also fell sharply per euro to ¥116.00.

British pound - Pound bulls remained shy on Tuesday for fear that the Bank of England might dull the prospect of monetary tightening in a midweek report should it strike to downgrade its growth outlook for the economy. The Bank's quarterly inflation report due Wednesday projects growth and inflation two-years forward. Given the impact of huge government spending cuts likely to drag on growth some suspect that the Bank's tradition of forecasting might embody a further downgrade to the economy. The pound fell to $1.6372 having earlier slipped to as low as $1.6328. Even today's British Retail Consortium report on store sales was tainted by the high number of public holidays and was also affected by the warmest April on record. The report said sales rose at the fastest pace last month in five years. The pound lost ground to the euro, which earlier put in a one-month low to trade at 87.86 pence.

Canadian dollar - The Canadian dollar traded at its best since Friday at $1.0414 U.S. cents despite a negative start to crude oil trading. The lack of correlation has recently become accepted given the many positives aspects displayed by Canada these days. Its first majority government in seven years will reduce spending making it the first G7 nation to restore budgetary stability within the group of leading powers. Despite the fact that half of its export revenues come from raw materials, dealers equally recognize the non-commodity business side of the economy is running at a comfortable clip.

Aussie dollar - The Aussie has struggled to reverse overnight weakness against the greenback but in early New York has successfully done so to reach $1.0809 U.S. cents. Within the last several hours the Australian Treasurer Wayne Swan announced the first cut in government spending since fiscal year 1988/89 in an effort to offset the nation's biggest mining boom in history. The A$76 billion mining-boom is being seen as sufficient stimulus to an economy that this year will grow by 2.5% through June and boost output next year to 4%. The government also unveiled a dip in the projected level of inflation from 3.25% in the quarter through June to 2.75% in 2012. The budget deficit of close to A$50 billion will be more than halved in 2012 while Mr. Swan projects a return to surplus by 2013 thanks to prudent spending cuts of A$22 billion over four years. The budget is now projected to add power to the Reserve Bank's 1.75% string of monetary tightening enacted between October 2009 and November 2010.

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Source: Interactive Brokers