The daily debate as to whether the global recession is easing or worsening once again fueled the tug-of-war between risk appetite and risk aversion, with those believing the economic situation is looking brighter able to chalk up a win in Asian trade. As is usually the case of late, perception is reality....If traders see positive signs that the global economy looks better, they buy into riskier assets. Conversely, if they perceive that the situation is still perilous, risk aversion trades are made, most notably in the buying of Yen and US Dollars, the so-called ''Safe-Haven'' currencies. Today saw the riskier assets such as the Euro and Pound make gains against the Yen and Dollar in a market that seems to be looking for hints as to where to go next.
EUR/USD regained its footing after a big figure slide in NY carried into Asia's morning, touching 1.3807 before climbing back to just short of the 1.3900 mark. The first BRIC, (Brazil, Russia, India, China) emerging economies meeting in Russia helped spare the Greenback as they issued a statement that the world needs ''...further diversification...'' in currencies, but failed to mention the almighty Dollar by name. This was quite a change from the ''anti-dollar'' statements that have been so loosely spewed out of Russia recently.
The EUR/JPY bottomed out to a two week low of 132.54 and dramatically reversed as equities looked better and S&P futures pointed higher, pushing the pair to highs in the 134.10 area. With the USD/JPY, we briefly touched a two week low of 95.96 and subsequently blasted off to 96.70 levels as investors poured more money into higher yielding overseas assets. The Aussie and Kiwi Dollars both erased losses against the Dollar and Yen as they benefitted from investors seeking higher yields. Keep an ear open in the London session for any further chatter out of the BRIC meeting and also be aware of Swiss Retail Sales and UK MPC Meeting Minutes at 7:15 GMT and 8:30GMT respectively.
Upcoming Economic Data Releases (London Session) prior expected
| 6/17/2009 | 7:15 | SZ | Retail Sales (Real) (YoY) | APR | 1.20% | - - |
| 6/17/2009 | 8:30 | UK | Bank of England Minutes | 17-Jun | ||
| 6/17/2009 | 8:30 | UK | Claimant Count Rate | MAY | 4.70% | 4.90% |
| 6/17/2009 | 8:30 | UK | Jobless Claims Change | MAY | 57.1K | 60.0K |
| 6/17/2009 | 8:30 | UK | Avg Earnings inc bonus 3M/YoY | APR | -0.40% | 0.20% |
| 6/17/2009 | 8:30 | UK | Avg Earnings ex bonus 3M/YoY | APR | 3.00% | 2.80% |
| 6/17/2009 | 8:30 | UK | ILO Unemployment Rate (3mths) | APR | 7.10% | 7.30% |
| 6/17/2009 | 8:30 | UK | Manu.Unit Wage Cost (3Ms/YoY) | APR | 9.80% | - - |
| 6/17/2009 | 9:00 | SZ | ZEW Survey (Expectations) | JUN | -3.9 | - - |
| 6/17/2009 | 9:00 | EC | Euro-Zone Trade Balance | APR | 0.4B | -1.5B |
| 6/17/2009 | 9:00 | EC | Euro-Zone Trade Balance sa | APR | -2.1B | -1.5B |
| 6/17/2009 | 9:00 | EC | Construction Output SA MoM | APR | -1.00% | - - |
| 6/17/2009 | 9:00 | EC | Construction Output WDA YoY | APR | -8.70% | - - |
