The Euro attempted a rebound move against the U.S. Dollar early yesterday morning on the back of better than expected German PMI Services, trading as high as 1.29 but it failed to capitalize on its gains and it quickly retreated back to the pre-PMIs levels at 1.2850.
Euro-zone PMIs did not help to boost confidence as they came out slightly short of expectations. France looks to be the weakest link at the moment within Eurozone as contraction continued in the country. In general inflation expectations have been weakened and this pressures ECB for a more aggressive monetary policy action.
The U.S. Dollar was under selling pressure against the Japanese Yen as well, as the latter gained strong support across the board. The JPY was strengthened mainly because of Japan’s Prime Minister Abe comments that Japan needed to be careful over the impact of a weaker Yen on regional economies, fuelling speculations that the Japanese government would seek to slow down yen losses. USD/JPY last stood at 108.64 this morning, after trading as low as 108.30 yesterday afternoon. The pair however remains near the highs and the move was a more profit-taking reaction rather than trend reversal.
The gold benefited from the general U.S. Dollar selloff/profit taking and retreated from its lows at 1208 $/ounce, to trade as high as 1235$/ounce yesterday afternoon. It has now however retreated back to 1225$/ounce.
Today’s economic calendar focus is on the German IFO surveys at 08:00 GMT. Later this afternoon U.S. Crude Oil and Gas inventories might spark some interest on commodity trading.
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