After a strong beginning of the greenback this week underpinned by loses in the equities markets, the greenback has started losing its upside momentum today giving back most of its earlier gains across the broad after the release of the US labor report of May which has shown losing of 345k jobs and these were lower than the markets forecasts of losing 525k.
The single currency could creep up above 1.40 after its suffering yesterday from the S&P downgrading of The Irish economy to negative on the credit crisis consequences. The single currency could make a bottom yesterday versus the greenback at 1.38 while it was trading by the US labor data last Friday at 1.42 before joining the gains of the equities market right directly after the release and giving back the lead to the greenback to drive it down to close below 1.4 support which helped the greenback technically to record this level. The single currency is still the biggest loser in the recent few days and it was undermined today too by the weak germane industrial production of April which came down by 1.8% monthly and the market was waiting for a marginal decline by just .2% after March rising by .3% which made the single currency lagged behind the other European currencies versus the suffering greenback.
The cable which was already undermined by the political concerns around the Labor party future could compensate today all of its recent loses versus the greenback trading right now above 1.625 again after reaching 1.58 yesterday and the next support is expected to be at
1.6435 then this year high which it has made last week at 1.666. The BOE decided recently to keep the interest rate unchanged at .5% keeping its quantitive easing plans of buying 125b pounds of UK bonds affording the required funds to stimulate the current struggling economy. This program has initiated with 75b pounds to be ended by this month but it has been extended to 125b and it can be prolonged to August.The gold after finding support last week at 960$, it could not be sustained above 980$ after the labor data and it has fallen below 960$ and it is still suffering under this level increasing the technical pressure on it to reach 942.8$ yesterday before joining the currencies advances versus the greenback today and trading right now at 955$. The gold has found support which pushed it above 980$ recently from the worries rising about the US treasuries confidence amid the current increases of the commodities and energy prices which come accompanied with the rises of the market confidence in the recovery.
God Willing, it is important to wait for the release of US Retails sales of May later this week which are expected t be up by .3% after April declining by .5% excluding the auto sales and also, we wait by the end of the week for the preliminary reading of University of Michigan consuming sentiment survey of June which is expected to increase to 69.9 from 68.7 in May.
Best wishes
FX Consultant Walid Salah El Din E-Mail: snipped-for-privacy@fx-recommends.com