Wednesday June 4, 2008 - 20:38:31 GMT
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FX Blog- Market Snapshot Far East Open for 5 June 2008
GVI Market Snapshot- Far East Open for June 5, 2008
Profile of Key Markets:
- The USD is trading roughly steady vs. the EUR from late Tuesday levels. That is a notable accomplishment given the magnitude of the EUR/USD loss on Tuesday.
- The GBP has eased vs. the EUR and USD following the weaker than expected U.K. May Services PMI report. A key focus now is BOE monetary policy with the central bank confronting high inflation and a weakening economy. The BOE is generally expected to hold policy steady on Thursday, but most expect several rate cuts by yearend.
- The EUR/USD trading back below the neutral 1.5500 line. The ECB policy decision (no change expected and press conference on Thursday will be closely watched.
- As for the USD, the markets continue to respond to the verbal intervention in the U.S. currency by Fed Chairman Bernanke on Tuesday. The new USD policy could face a test on Friday following the May employment data.
- The USD/CHF is steady along with USD/JPY. The CHF/JPY is pivoting the psychological 100 line. The CHF is up against the EUR. The EUR is steady vs. the JPY.
- Oil remains soft and has shown little ability to rally on constructive news. It still is a key influence on the EUR/USD. Gold is down as well. The AUD gained following stronger than expected GDP data, which rekindled rate hike hopes.
- Asian equities ended mixed. The better USD tone boosted the Nikkei. European bourses closed weaker. U.S. equities are higher.
- JGB prices fell sharply, while the prices on E-Z bonds improved. U.S. bond prices are now lower. The spread on EZ minus U.s 2s was last -190bps, +6.
- Key releases Thursday include the Aussie Trade figures and the BOE and ECB policy decisions. U.S. weekly jobless figures are due along with the Canadian Ivey PMI data. See the GVI Calendar for the full schedule of key data.
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