EURO
The euro appreciated vis-à-vis the U.S. dollar today as the single currency tested offers around the US$ 1.3555 level and was supported around the US$ 1.3420 level. The common currency retraced some of Friday’s losses as traders reacted to a positive showing in U.S. equity markets that saw the Dow Climb more than 200 points on the day. Data released in the U.S. today saw the May NAHB housing market index improve to +16 from +14 in April. At the same time, another NAHB reported indicated housing affordability now stands at its highest level on record. There are reports that some U.S. financial institutions including Goldman Sachs, Morgan Stanley, and JPMorgan Chase may make an application to the U.S. government to repay their TARP funds early, a move the Obama administration could block. April housing starts and building permits will be released tomorrow. In eurozone news, Germany’s economics ministry reported “Over the past months, the decline in German economic activity intensified in line with the global economic slump. In the meantime, however, there are increasing signs of a stabilization.” Notably, these remarks were issued just days after it was reported Germany’s first quarter gross domestic product evidenced its sharpest decline since at least 1970. Data released in the eurozone today saw a surprising trade surplus of €400 million in March, up from a revised February deficit of -€1.0 billion. Euro bids are cited around the US$ 1.2765 level.
JPY / CNY
The yen depreciated vis-à-vis the U.S. dollar today as the greenback tested offers around the ¥96.45 level and was supported around the ¥94.55 level. A bid tone returned to the pair and yen crosses as risk appetites increased on the premise the global economy may be on the mend. Also, Vice finance minister Sugimoto verbally intervened against the yen, reporting “The negative impact of excessive market volatility on the economy and financial markets is undesirable. We will continue to monitor (the situation) closely.” The pair was near two-month lows last week. The government’s consumer confidence survey was released overnight and rose to 32.4 in April from 28.9 in March, indicating an improvement in consumers’ economic outlooks for the next six months. The Nikkei 225 yesterday stock index lost 2.44% to close at ¥9,038.69. U.S. dollar offers are cited around the ¥104.15 level. The euro moved higher vis-à-vis the yen as the single currency tested offers around the ¥130.65 level and was supported around the ¥126.95 level. The British pound moved higher vis-à-vis the yen as sterling tested offers around the ¥147.85 level while the Swiss franc moved higher vis-à-vis the yen and tested offers around the ¥86.50 level. In Chinese news, the U.S. dollar appreciated vis-à-vis the Chinese yuan as the greenback closed at CNY 6.8270 in the over-the-counter market, up from CNY 6.8215. The Chinese media reported China’s gold reserves may allow the government to liberalize the yuan’s convertibility further.
