Posted on May 8, 2012 by Trading Point Investment Research Desk at 8:28 pm GMT
Euro is bearish, being weighed down by political woes in post-elections Greece and France as both countries voted for anti-austerity parties. The single currency broke below $1.30 in the US session before moving back above but remains vulnerable until Greece is able to form a government. Until then EURUSD will probably be range-bound as investors wait in the sidelines for more developments in the Greek situation. In New York trading today, the pair traded between 1.2981 and 1.3042.
Sterling is down 0.3 percent versus the dollar. GBPUSD traded lower in the US session, ranging from 1.6140 and 1.6166. The pound is underperforming due to overall risk aversion and also weighed down by UK housing data today which came in worse than expected. The focus is on the Bank of England policy meeting on Thursday.
Yen remains strong due to safe haven flows but prolonged strength will be limited as a result of ongoing policy easing from the Bank of Japan as well as interventionist rhetoric from policymakers. Eyes are on Japan’s current account numbers to be released on Thursday and may provide for some yen weakness. USDJPY was little changed in US trading today, hovering above 79.70. EURJPY dipped to 103.51.
The Canadian dollar weakened sharply against its US counterpart due to risk aversion affecting commodities, especially oil, a major Canadian export. USDCAD rose to 1.0021 the highest in over three weeks. Crude oil has been trading below US100 all week. Oil hasn’t traded below $100 since February.
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