“The euro has been showing remarkable resilience to negative news as the single currency’s drop in response to the Spain credit rating downgrade proved to be short-lived. It’s likely that a relatively smooth Italian bond auction is helping the euro, while soft economic data appears to have had little impact”, wrote Vassili Serebriakov, currency strategist at Wells Fargo Bank.
About the BoJ monetary policy, the market had already priced in rumors of extra 10 trillion Yen, by June 2013, to a total of 40 Trillion. Despite its Governor Shirakawa intentions of easing till the economy reaches the 1% inflation target, the JPY is edging higher after an early plunge. The USD/JPY has printed its daily low at 80.42 and approaching 80.29 (Apr-16 low).
The USD got even more pressured after the US Q1 GDP report release, pointing to lower growth than expected (2.2% vs 2.5%). “Even with the positives of a stronger consumer, overall US growth remains moderate, suggesting the Fed should remain comfortable with its commitment to exceptionally low rates until late 2014”, added Serebriakov.