Currencies Fall Against Dollar In Today’s Trading

EURO

The euro depreciated vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.5700 figure and was capped around the $1.5815 level. The common currency gave back much of the gains it had notched over the past three trading days. A retreat in NYMEX July crude oil futures back to the $130/ $129 handle added to the pair’s decline. Data released in the U.S. today saw April new home sales climb to an annualized 526,000 unit rate but remain at depressed levels not seen since the 1981 recession. Other data released in the U.S. today saw May consumer confidence fall to 57.2 from a revised 62.8 in April, a sixteen-year low and the fifth consecutive monthly decline. Also, the S&P/ Case Shiller March home price index was off a record 14.4% and the Richmond Fed manufacturing index fell to -3 from 0 in April. In eurozone news, the German GfK consumer confidence indicator fell to 4.9 in June from 5.6 in May while the French Insee business confidence indicator fell to 102 in May from 106 in April. European Central Bank member Liebscher was hawkish in his remarks and ECB’s Stark added “Due to the upside risks to price stability there’s no reason for complacency.” ECB’s Stark said money and credit supply growth are a “crucial signpost” for managing inflation expectations. Other data released today saw final Q1 GDP growth of 1.5% q/q, unchanged from preliminary results. Euro bids are cited around the US$ 1.5230 level.

JPN/CNY

The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥104.30 level and was supported around the ¥103.25 level. The pair added to yesterday’s gains following dollar gains across the board. Data released in Japan overnight saw the April corporate services prices index up +0.1% m/m and +0.5% y/y. Finance minister Nukaga reported the government is likely to propose Keio University’s Kazuhito Ikeo for a Policy Board vacancy at Bank of Japan. The opposition Democratic Party railed against Nukaga’s announcement. There are currently two vacancies on the Policy Board including a deputy governorship. The Nikkei 225 stock index gained 1.48% to close at ¥13,893.31. Dollar bids are cited around the ¥103.00/ 101.35 levels. The euro moved higher vis-à-vis the yen as the single currency tested offers around the ¥163.90 level and was supported around the ¥163.00 figure. The British pound and Swiss franc moved higher vis-à-vis the yen as the crosses tested offers around the ¥205.85 and ¥101.30 levels, respectively. The Chinese yuan depreciated vis-à-vis the U.S. dollar as the greenback closed at CNY 6.9559 in the over-the-counter market, down from CNY 6.9366. People’s Bank of China Governor Zhou warned China “must prevent excessive price and investment growth” after the 12 May earthquake.

STERLING

The British pound weakened vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.9715 level and was capped around the $1.9845 level. CBI’s quarterly survey of the service sector reported that business volumes and values remain weak with depressed expectations among consumers and businesses. BBA reported April mortgage lending activity expanded on account of refinancings, up ₤5.4 billion. Cable bids are cited around the US$ 1.9360/ 1.9100 levels. The euro moved lower vis-à-vis the British pound as the single currency tested bids around the ₤0.7955 level and was capped around the ₤0.7985 level.

SWISS

The Swiss franc depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the CHF 1.0325 level and was supported around the CHF 1.0220 level. Technically, today’s intraday high was right around the 38.2% retracement of the move from CHF 0.9865 to CHF 1.0625. Data released in Switzerland today saw the April consumption indicator fall to 2.18 from 2.25 in March while the Swiss April trade surplus reached CHF 1.57 billion, up 23% m/m. U.S. dollar offers are cited around the CHF 1.0760 level. The euro and British pound gained ground vis-à-vis the Swiss franc as the crosses tested offers around the CHF 1.6215 and CHF 2.0370 levels, respectively.

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