The Dollar and the Yen both began the week with a solid start as Friday's data out of the US and Euro Zone offered investors little to be optimistic about as the risk trades seem to once again be off the table.
The risk aversion began from the starting gate, as USD/JPY opened the session about 40 pips lower than the Friday close and continued to drift lower to finally hit bottom at 94.55, representing a level not seen in this pair since the end of March. The Yen crosses all followed lower, with EUR/JPY dropping a few pips below the 127.00 big figure for the first time since late April. Asian stocks were also all lower for the day, with the Nikkei lower by 2%. However, late in the session the Yen lost its grip as rumors circulated that the Japanese issued JGB government bonds could be downgraded later in the day. It looks like most Yen gains made for the session are currently at risk of being lost due to the pending JBG announcement. The EUR/USD pair toppled lower as stops triggered and the EUR/JPY selling helped grease the Euro wheels, the pair opened near highs of 1.3490 and hit bottom at 1.3423, before a late turnaround pushed the pair back near 1.3455 levels. Friday's German and Euro Zone GDP showed the economy contracted at record levels, signaling rough waters ahead for the usually indecisive ECB. Thoughts are that the ECB may be backed against a wall to continue cutting rates...
Upcoming Economic Data Releases (London Session) prior expected
| 5/18/2009 | 9:00 | EC | ECB's Weber Holds Speech at Event in Dusseldorf | 18-May | ||
| 5/18/2009 | 9:00 | EC | Euro-Zone Trade Balance | MAR | -2.0B | -0.3B |
| 5/18/2009 | 9:00 | EC | Euro-Zone Trade Balance sa | MAR | -4.0B | -3.8B |
