Forex Magnum

The euro (EUR) recovered against the dollar to 1.2516 today after a fall to 1.2409 the previous day. Spain’s Treasury Minister warned that the country’s problematic banking sector has a serious impact on the government’s funding ability raising hopes that policymakers will intervene in the market to buy Spanish government bonds. The Group of Seven Industrialized Nations ministers had a conference call yesterday where they all agreed to work together to tackle the deepening eurozone debt crisis and deal with problems in Greece. All eyes now turn to the European Central Bank monetary policy meeting where interest rates are expected to remain unchanged at 1%.

The US dollar (USD) weakened against a basket of currencies on an improved sentiment in the market. Versus the safe haven Japanese yen (JPY), the greenback jumped to 78.94 from 78.10 as investors remain cautious that the Bank of Japan may step in the markets to weaken the yen. Focus now turns to the Group of Seven Industrialized Nations conference call where they will discuss developments in the eurozone.

The Australian dollar (AUD) rallied against the greenback to 0.9862 from 0.9710 following the release of the first quarter Gross Domestic Product figures. GDP surprised the markets by showing a 1.3% expansion of the Australian economy while economists expected 0.5% raising speculation there will be no need for further easing of its monetary policy.   Yesterday, RBA cut its main cash rate by 25 basis points to 3.5% but the move was less aggressive as investors were expecting a 50 basis points cut.

Oil edged higher to 85.02 dollars a barrel from 83.31. Gold (XAU) jumped to 1628.71 dollars an ounce from 1611.72 and against the euro it rose to 1298.64 from 1295.30 Silver (XAG) edged higher to 28.85 dollars an ounce from 28.10. Stay in tune throughout the day with foreign exchange bullets!

Equities	EUROPE				US				ASIA3
	FTSE 100	-1.14%	▼		S&P 500	0.57%			NIKKEI	1.89%
	DAX	-0.15%	▼		DJIA	0.22%			HIS	1.34%
	CAC	1.07%			NASDAQ	0.66%			CSI 300	0.38%

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