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Currency Analyst since 2010

May 31: Asian session

US dollar weakened yesterday versus its counterparts due to lower than expected US GDP growth in Q1 (2.4% vs. the forecast of 2.5%). The market’s fears about the potential tapering of the Fed’s QE program eased and it was a good day for risk-on assets.   

EUR/USD is trading below yesterday’s high of $1.3060. European economic confidence rose from April’s 88.6 to 89.4, according to data released on Thursday. Today the euro zone’s calendar is full enough. Watch German retail sales, French consumer spending, Italian and euro zone’s unemployment and the region’s flash CPI (06-09:00 GMT). GBP/USD is above $1.5200 after it rose to $1.5240 yesterday. USD/CAD is trading just above 1.0300 after yesterday’s decline. USD/CHF has tested a new low at 0.9520, but recovered to 0.9550.

USD/JPY is consolidating around the yesterday’s close at 100.80. Tonight Japan released a bunch of data that showed a better performance for the economy. Tokyo core CPI for May came at +0.1% y/y (expected -0.2%, prior was -0.3%). Japan preliminary industrial production for April rose by 1.7% m/m vs. expected 0.6%.

AUD/USD trades in the negative territory around $0.9650 after two days of recovery from a low of $0.9520. NZD/USD hovers around $0.8080. New Zealand business confidence for May rose from 32.3 to 41.8. Traders are looking forward to the Chinese manufacturing PMI to be released on Saturday (forecast – negative).

Today watch global stock and bond market as they will influence the currency trading. The US will release personal income, personal spending, Chicago PMI and the final March University of Michigan consumer confidence numbers in the evening (12:30-13.55 GMT). Also note that it’s the last day of the May and as USD rose this month, market players will need to sell it in order to rebalance their portfolios.

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