Factor Behind Dollar

Fundamental Analysis EUR European stocks returned to growth, despite services and manufacturing purchasing managers indices across Europe and German business confidence shrank more than expected. The Stoxx Europe 600 Index added 1.0 percent to 241.81. Cable & Wireless Communications Plc soared 19 percent. Sonova Holding AG gained 2.5 percent. Bayer AG declined 1.1 percent. U.S. futures and Asian stock little changed. S&P 500 futures gained 0.3 percent, MSCI Asia Pacific index added 0.1 percent. USD The US Dollar followed bullish trend on Thursday as Germany disapproves issuance of Eurobonds that may help to ease Greek debt burden. Traders are also cautions ahead of Euro Zone's manufacturing data release due later today. The US Dollar index, which tracks the greenback's performance ...

Crude oil has started the week with negativity to proceed with the sharp downside wave amid intensifying fears in Europe with increasing anticipations that Greece would exit the Euro bloc. The euro outlook is under scrutiny and eyes are on what the finance ministers will discuss today. More downside pressure stemmed from the Saudi Arabia oil minister as he reiterated that supply is still high, keeping the bearish bias intact. Oil dropped from the opening at $ The two main factors behind this strong downside pressure on crude remain evident, as the political situation in Europe continued to deteriorate after the political parties in Greece failed to form a coalition government for the third time and the anti-austerity parties found more support in the parliament. The biggest anti- ...

Fundamental News The new Euro-zone politics will dominate markets throughout this week, as anti-austerity political parties take hold in Europe. The confirmation of Hollande’s victory in France marks the end of the Merkel-Sarkozy dominance at the political heart of Europe. Investors are acutely aware of the new leader's distain for austerity measures and some elements of the EU's new fiscal treaty. Mr Hollande has vowed not to ratify the new EU treaty unless new growth promoting measures are added, which is going to significantly draw-out the process of fiscal integration, if not stop it altogether. While in Athens, both mainstream political parties saw a dramatic collapse in support with anti-austerity groups seizing the opportunity to bolster their support. The head of the Syriza party, ...

Sunrise Market Commentary - Fixed Income: German yields set record lows - Depressing April PMI's and unemployment data in the EMU set the tone for a risk off session. Core bonds surged higher and the German Bund future reached a new record high. In the US session, US equities rebounded and triggered profit taking in US treasuries. German bonds stayed near the highs however. - Currencies: Awful EMU PMI data hit the euro - The focus in currency trading shifted from the US to Europe. On Tuesday, EUR/USD declined due to dollar strength in the wake of the ISM release. On Wednesday, an awful set of EMU data triggered a next selling wave. EUR/GBP continues to set new lows, too. We doubt that the Draghi press conference will be able to change the course of events The Sunrise ...

(Reuters) - World shares eased and the dollar hit a two-month low against the Japanese yen on Tuesday, after signs of recovery in China's vast factory sector failed to offset worries over the health of the global economy and the euro zone crisis. But activity was limited with many markets in Asia and Europe closed for the May Day holiday. The MSCI's world equity index .MIWD00000PUS was down just 0.1 percent to 328.40, as it added to losses of about 1.5 percent in April. The stronger yen hit Japan's export-related equities, sending the Nikkei index .N225 to a 2-1/2 month closing low. "In general, stock markets and risk assets seem to be extremely resilient in the face of the news flow which has undoubtedly been in the more negative nature," James Ferguson, strategist at Westhouse ...

The euro slid against the dollar on Monday after two days of gains, rattled by poor euro zone data and concerns that the region's debt crisis could spread to other healthier European nations after Dutch officials failed to agree on budget cuts. Analysts said sentiment toward the common currency was bearish, with most investors looking to sell it on any rally before debt auctions this week in Italy and the Netherlands. After the breakdown in budget negotiations, Dutch Prime Minister Mark Rutte said he tendered his cabinet's resignation to the Dutch queen, adding that she will consider it and had asked for the government in the meantime to keep doing whatever was in the country's interest. The budget impasse in the Netherlands could threaten its triple-A rating and weighed on the euro. A ...

HIGHLIGHTS OF THE WEEK United States Economic data out of the U.S. gave mixed signals of the state of the economy. While retail sales started the week with a strong 0.8% increase, industrial production stalled and housing starts and existing home sales both fell. A feeling of déjà vu has gripped economy watchers remembering back to last year's spring slowdown. While we expect growth to slow from relatively strong first quarter growth, we continue to expect real GDP growth of around 2.0%. The recent decline in gasoline prices contributes to our relative optimism. The U.S. economy is healing, but the shock from the financial crisis is still reverberating and will keep a lid on growth rates. The biggest risk to economic growth remains fiscal drag in 2013. Canada The Bank ...

(Reuters) - The yen hovered near its lowest levels in ten days against the dollar on Friday and was set to stay under pressure on expectations of more easing by the Bank of Japan next week, although its outlook further out is less certain. The greenback stood at 81.63 yen, having hit a 9-day high of 81.74 the day before. That brought the April 10 peak of 81.87 into focus. The euro climbed as high as 107.35, staging a powerful comeback from Monday's trough of 104.63. Reinforcing expectations that the central bank could ease its already super-loose monetary policy, governor Masaaki Shirakawa said it will continue powerful monetary easing until a 1 percent inflation target is in sight. Piling more pressure on the bank, a senior International Monetary Fund official said the BOJ should ...

FUNDAMENTAL OUTLOOK at 0800 GMT (EDT +0400) WORLD The yen weakened overnight despite a press report indicating that the Bank of Japan’s inflation forecasts may be raised. It seems some FX investors are already positioning themselves for USDJPY upside ahead of next week’s FOMC and BoJ meetings – both of which are likely to push the pair higher towards our 3m forecast of 85. Elsewhere, our bullish call on the Canadian dollar was supported by the more hawkish posture of the Bank of Canada, which warned that “in light of the reduced slack in the economy and firmer underlying inflation, some modest withdrawal of the present considerable monetary policy stimulus may become appropriate”. This anticipated shift was the key driver of our USDCAD forecast revision last week (to 0.98 from 1.03 on a ...