US

EURUSD FXE
Currencies

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Markets are off to a positive start in the early week, with two key developments over the weekend seen as the primary drivers for the initial surge in risk correlated assets. The news that EU assistance to the Spanish banking sector in the amount of Eur100B has well exceeded estimates of most analysts, while Chinese data was not as bad as many had feared. Both of these developments have resulted in a market rally driven by the expectation that the global economy will continue to be supported by proponomics.

Australian Dollar and British Pound Outperform on PBoC, BoE
Currencies

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After yesterday’s massive rally – in fact the biggest rally since December by the Australian Dollar and the Dow Jones Industrial Average since December 20, 2011 – it would appear that all global issues have been resolved.

NZ Dollar Gains on China Growth Prospects, G8 Summit Keeps Euro Low
Currencies

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The US Dollar (ticker: USDOLLAR) traded lower against the Australian Dollar and other high-risk counterparts on a modest improvement in financial market sentiment, but overall momentum left it poised for modest gains against the Euro and British Pound. It was a quiet start to the trading week as highly-anticipated events over the weekend failed to produce material breakthroughs or shifts in financial market sentiment.

Dollar: JPMorgan Fiasco Fails to Set Off Crisis, Back to Europe
Currencies

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Any way you cut it, the dollar’s recent performance is impressive. So far this month, the Dow Jones FXCM Dollar Index (ticker = USDollar) has climbed 1.9 percent to its highest weekly close since the middle of December. Looking at currency’s performance in specific corners of the market, we find the EURUSD is below 1.3000, AUDUSD is at its lowest level this year and the greenback has even been able to muscle gold (another safe haven) into a potentially critical reversal of a trend that goes back over three years.

Global Economy Vulnerable As Risk Off Headlines Widespread
Currencies

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JP Morgan losses seriously diminish credibility in banking sector Political saga in Eurozone continues to shake investor confidence China economic data disappoints and weighs further on risk correlated assets Commodity bloc and emerging market FX exposed German; UK inflation mixed The intense risk-off price action that we saw over the past several sessions looked like it might be poised for reprieve into North America on Thursday, before markets got wind

US Dollar Rally May Find Added Fuel in Global Slowdown Fears
Currencies

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Most of the major currency pairs continue to show significant correlations with the MSCI World Stock Index, suggesting that broad-based risk appetite trends remain dominant as drivers of price action. This puts thematic macro-level concerns – specifically, the durability of the US recovery and its ability to offset headwinds from Europe and China facing global growth – squarely at the forefront. The US economic calendar is relatively quiet, with headline event risk clustered at the end of the week as PPI and UofM Consumer Confidence readings cross the wires on Friday. This puts the onus on evaluating the extent of downward pressure.

Euro
Currencies

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– Market optimism fades and suggests more USD strength – Widespread calls for a break lower in Eur/Usd – Key economic data and political risk ahead – Focus for now on monthly US employment data Although we have seen no clear breakouts in most of the major currencies, and although the Euro still remains locked in a very well defined 1.3000-1.3500 consolidation (that has defined trade for much of 2012),