USD
USD fell against most currencies last week as demand for the dollar as safe haven declined amid global stocks advanced and economic releases indicates that global economy may be stabilizing as central banks rate cuts and government measures takes effect, boosted speculation that global recession will end in 2009. Euro-zone's economic figures' indicates recession in the region may be stabilizing as ECB rate cuts and governments' measure bolstered he regions' businesses and investors confidence, while some banking corporation in Europe posted a better than expected 1st quarter profit boosted expectation that the worst of banking crisis is over. US economic figures also showed improvement in housing markets and manufacturing sector as near bottom home price lured buyers while cheaper raw material price pushed down manufacturers production cost. Services and factory industries in Europe contracted in April at the slowest pace in 6 month as governments measures and rate cuts eased consumer and businesses credit access.
Housing markets in US are showing improvement as demand for homes rose amid lower property prices and interest rate. G-7 finance ministers last week said recent economic data suggest that the economy pace of decline at their country has slowed, and some signs of stabilization are emerging, reducing appeal of the dollar as safe haven. The dollar should recover against the euro this week after recent retreat as investors may exit position on profit taking and stocks might decline as bank may post further losses on bad debt, while committee member may indicate that there's still downside risk for US economy at this week's meeting. Monitor this week's US economic releases – US Dallas Fed manufacturing activity, USD Case Shiller composite-20, US Consumer confidence, US Richmond Fed manufacturing index, US ABC Consumer confidence, US GDP, US Personal consumption, US Core personal consumption expenditure, US GDP Price index, FOMC Rate decision, US Core personal consumption expenditure, US Personal consumption deflator, US Personal income, US personal spending, US Initial jobless claims, US Employment cost index, Chicago PMI, US Domestic vehicle sales, US ISM Manufacturing, US ISM Price paid, US University of Michigan consumer confidence and US Factory orders -, cross currencies important economic releases, Fed/Treasury or other central banks' member statements/comments, US indexes movement, news related to major corporate and any measures/plans intended to bolster the region's economy.
JPY
JPY fell against most currencies last week as US stocks advanced on speculation that the global economy is stabilizing and as Tesco, Burberry, Ford Motor, American Express, and Credit suisse posted better than expected 1st quarter profit. Stocks in Europe rose after economic figures showed economy in the region is stabilizing as government measures and ECB rate cuts is bolstering the region's economy. Investors flood into equities last week as reports showed US home prices rose posted its first consecutive monthly gain in 2 years, France consumer spending and Germany business confidence rebounded in more than economists forecast, indicating that recession in Europe may be stabilizing. Treasury Geithner and Fed said most banks that underwent stress tests hold enough capital, while G-7 finance ministers said recent data suggest that the pace of decline in their economies has slowed, and some signs of stabilization are emerging, increasing investors risk appetite.
The yen should recover this week as stocks in US and Europe may retreat on selling pressure as investors' exit position on profit taking and Fed members may indicate that the worst of the recession is not yet over as bank may post further losses on bad debts. Monitor this week's Japan economic releases -Japan Retail trade, Japan Large retailers sales, Japan small business confidence, Publication on BOJ Semi annual economic outlook report, BOJ Rate decision, Japan PMI, Japan Industrial production, Japan Housing starts, Japan Household spending, Japan Jobless rate, Tokyo CPI, Japan CPI and Japan Vehicle sales -, cross currencies important economic releases, central banks' member's statements/comments, US indexes movement, commodities performance, news related to major corporate and governments' measure/plan to bolster the economy.
EUR
EUR strengthened against most currencies last week as demand for the dollar as safe haven fell after stocks in Europe and US advanced on speculation that the global economy is stabilizing, reinforced by figures that indicates manufacturing and housing markets are showing improvements. Figures showed France consumer spending rebounded more than expected in March, Germany's investor confidence rose to the highest level in almost 2 years April and Germany business confidence rebounded more than economists forecast in April, indicating governments measures and ECB rate cuts are bolstering the region's confidence and spurred speculation that recession in Euro-zone will end in 2009. US economic figures shows that manufacturing and housing markets in the region are showing signs of stabilizing as government measures and Fed rate cuts eased credit accessibility and encouraged spending, while services and factory industries in Europe contracted in April at the slowest pace in 6 months, boosting investors risk appetite and reducing appeal of the dollar as safe haven.
Fed last week said most banks that underwent stress tests hold enough capital, while G-7 finance ministers said recent data suggest that the economy pace of decline at their country has slowed, reducing demand for the dollar as safe haven and boosting appeal of the euro. The euro are likely to retreat this week as stocks may retreat on selling pressure on investors profit taking and central banks' members may indicates that the economy will not have a quick recovery and risk of deepening recession persist. Monitor this week's Euro-zone economy release – Germany Import price index, Germany Gfk Consumer confidence, Italy Consumer confidence, Germany CPI, France Consumer confidence indicator, Italy Business confidence, Italy Retail sales, Italy Trade balance Non-EU, Euro-zone M3, Italy Hourly wages, Euro-zone Economic confidence, Euro-zone Consumer confidence, Euro-zone Business climate indicator, Euro-zone Industrial confidence, Euro-zone Services confidence, Germany Retail sales, Germany ILO Unemployment rate, France PPI, Germany Unemployment change, Germany Unemployment rate, Euro-zone CPI Estimate, Euro-zone Unemployment rate and Italy CPI - cross currencies important economic releases, central banks' member's statements/comments, news related to major corporate, US indexes movement and speculation on any additional measures by European countries or its officials from the region.
Crude oil
Crude oil rose last week as the dollar fell against the euro, increasing appeal of commodities as inflation hedge and advancing equities pushed commodities prices higher on prospect that economy will recovery in 2009. US Energy Department storage report showed Crude oil inventories rose more than expected at the week before last and daily fuel demand is down 6.5% from a year earlier, suggesting fuel consumption continue to decline despite figures shows economy in US is stabilizing.
Figures also showed Germany business confidence and France consumer spending rebounded in more than economists forecast and Fed said most banks that underwent stress tests hold enough capital, while G-7 finance ministers said recent data suggest that the pace of decline in their economies has slowed, indicating that global economy may be stabilizing and fuel consumption will improve. Crude oil are likely remain on narrow range trading this week between $48 - $52 and probably will end up at low $50 at the end of the week. Monitor this week's US economic releases, central banks' member's statements/comments, news related to major corporate, US indexes movement, USD movement, geopolitical risk, major corporate fiscal results, stimulus to bolster the economy and storage report.
Loh Chang Yuen,
Junior Strategist
All rights reserved: Admiral Markets Ltd
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