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The euro (EUR) plummeted yesterday against the dollar falling as low as 1.2911 from 1.3003 on growing fears about Europe’s debt crisis. Investors are worried about Greece’s ability to avoid bankruptcy and that it may have to leave Europe’s single currency. Greek leaders failed to form a new government on Wednesday and fears of another election are heightened. Developments in Spain and its banking system continue to weigh on the euro after the nationalization of the country’s fourth-largest bank, Bankia. The Spanish government’s action to take a 45% stake on Bankia aims to dispel concerns about the country’s financial problems but fears pushed Spanish bond yields back above 6% today.
The US dollar (USD) strengthened against a basket of currencies yesterday as risk aversion dominated the markets. Against the safe haven Japanese yen (JPY) the greenback continues to be under pressure sliding to 79.42 from 79.93 and in the absence of an intervention by the Bank of Japan, the yen may remain strong as the political uncertainty in the eurozone resumes. Eyes turn to US jobs and trade balance figures due later today.
The Australian dollar (AUD) rebounded today against the dollar to 1.0119 from 1.0020 after the employment data was released. Figures showed an unexpected drop to the unemployment rate to 4.9% in April lower than 5.2% in March. The British pound (GBP) fell against the greenback to 1.6066 from 1.6156 but later it recovered its losses to trade at 1.6153. Focus turns to today’s monetary policy decision by the Bank of England which is expected to keep rates unchanged. What is interesting to see is whether policymakers will decide on an expansion of the asset purchasing program or whether MPC will move away from its easing cycle.
Oil edged lower to 95.17 dollars a barrel from 97.09. Gold (XAU) slid to 1579.90 dollars an ounce from 1604.29 and against the euro it edged lower to 1229.40 euro an ounce from 1234.36. Silver (XAG) dropped to 28.60 dollars an ounce from 29.40. Stay in tune throughout the day with !
| Outlook | Pivot | Preference1 | Sentiment2 | |
| EURUSD | 1.2980 | SHORT @ 1.2980 | 64% of deals buy EUR | |
| USDJPY | 79.80 | SHORT @ 79.80 | 85% of deals buy USD | |
| GBPUSD | 1.6110 | LONG @ 1.6110 | 39% of deals buy GBP | |
| AUDUSD | 1.0015 | LONG @ 1.0015 | 74% of deals buy AUD | |
| GOLD | 1600.00 | SHORT @ 1600.00 | 75% of deals buy GOLD | |
| OIL | 95.30 | LONG @ 95.30 | 82% of deals buy OIL |
| Calendar | Currency | Time (GMT) | Event | Forecast |
| GBP | 11:00 | BoE Interest Rate Decision | 0.5% | |
| USD | 12:30 | Initial Jobless Claims | 369K | |
| USD | 12:30 | Trade Balance | -50B |
| Equities | EUROPE | US | ASIA3 | ||||||||
| FTSE 100 | -0.44% | ▼ | S&P 500 | -0.67% | ▼ | NIKKEI | -0.05% | ▼ | |||
| DAX | 0.47% |  | DJIA | -0.75% | ▼ | HIS | -0.89% | ▼ | |||
| CAC | -0.20% | ▼ | NASDAQ | -0.39% | ▼ | CSI 300 | -0.12% | ▼ |
