Currencies Continue to Drive Higher With the Dollar on the Back Foot

It was a steady start to the week yesterday and with little in the way of fundamental data out we saw a continuation of the move south for the dollar, the major currency to gain from this last night was of course………..the Kiwi. Ok, so there’s no great reason for this but we did see a nice break of the topside trend line resistance and commodities were stronger across the board.

The Euro gained in the London session after Angela Merkel claimed that the Euro is ‘too weak’ for Germany due to ECB policy, however it was just another small step to the topside and traders may be seeing momentum start to wain at these levels.

We heard more from the EuroGroup this morning as they confirmed that a decision on any new loans for Greece will be made in June after they failed to come to an agreement this month. This issue has been simmering along in the back ground for a while, but it feels like it may become more prominent in the next few weeks with both the Eurogroup and IMF looking for Greece to complete ‘prior actions’ requirements before releasing further funds.

Looking ahead to today and at the risk of sounding like a broken record I think it’s going to be more of the same with traders looking for levels to continue to sell dollars. Although I think the contrarians out there will now be planning for break trades on the topside for dollar if we do start to see a change of sentiment.

We’ve got a few data releases to look forward to today and also a number of Central Bankers speaking and this could lead to a bit of volatility across the currencies. It’s quiet through the Asian session but as we move into the London session we have the German Ifo Business Climate due, swiftly followed by the Inflation Report from the BOE. In the US session the data is more second tier but we will hear from the FOMC’s Kashkari and Harker during the evening.

Good Luck Trading today and if you would like any further info or have any questions, please contact the team at info@sec.rakuten.com.au.

NB: News reports are coming through of a terrorist attack at a concert in Manchester and Police are confirming fatalities, in a bit of a sad reflection of the markets acceptance of this as a normal event that we haven’t seen too much of a reaction from the sterling or stock markets yet.

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