EUR/usd
«Greece is close to the end of the road” said Swedish Finance Minister yesterday, referring to the country's membership in the euro-zone. Two and a half years ago, when the analogy with the road was drawn, it was emphasized that it was the beginning of a long and hard journey towards financial stabilization. Apparently, Greece has successfully finished the journey, but in the wrong direction. Yesterday it became absolutely clear that the country will not manage to form a coalition government, so reelections will be held in a month. This news, coming prior to the active American session, hit the single currency and afterwards affected other risk-sensitive assets. It should be mentioned here that this is not the case when reaction lasts for a short period of time and then is followed by purchases of cheaper assets. The euro makes stops from time to time, but then again falls under selling pressure. Now EUR/USD is at 1.2730, which is a point lower than the daily opening price and a point higher than the lows of January 2011 and August 2010. S&P struggled not to fall lower at the start of trading, but eventually dropped to close out the day. Except for almost inconspicuous corrections on May 7 and 10, the Americans stocks depreciated each day this month. To be fair, however, it should be noted that the current market reaction is more restrained than a year ago. Those looking for good news may find it in yesterday's euro-zone preliminary GDP statistics, which proved to surpass the expectations. The economy didn't sink, but showed the zero growth against the levels of the preceding quarter and also of the same quarter a year ago. That happened due to 0.5%, by which the German economy went up. It's an unexpectedly strong growth, especially when compared to the forecasted level of 0.1%. The newly-elected French President Hollande yesterday arrived in Germany to meet Merkel. Eventually they said that they had managed to come to terms with each other. It's not clear yet what language prevailed in their discourse, French or German, but the talks about ‘fleeing to safety' are becoming more and more wide-spread.
GBP/USD
The British Trade Balance once again brought to the surface the hardships of the country's manufacturers. The Visible Trade Balance remained roughly at the same level as a month ago, having shown the £8.6bln excess of imports over exports. Of course, we can cling to the increase in export volumes, but imports don't drop behind. The Total Trade Balance change is almost deprived of dynamics, having made the £2.7bln deficit in March. Even before that publication the sterling had already approached the support and the poor data just intensified the bearish pressure (it's quite likely that Britain has fallen into recession). Even the euro sales, triggered by news about reelections in Greece, were of no help. The flight in the markets has pushed GBP/USD down to 1.5970 by now. Let's wait for King's commentary at the presentation of the quarterly inflation report.
USD/JPY
The sales in the stock and commodity exchanges haven't boosted the yen purchases, however. USD/JPY has been fluctuating around the 80 level for three consecutive weeks, with the amplitude of 35 points in both directions. Now trading is held at the upper boundary of the range. Looking from the broader perspective (starting with the second half of March), we see that trading is still within the descending trend, but there is a risk that this tendency will be broken today. Or we'll see large-scale sales of dollars for yens.
gold
The sales in the stock and commodity exchanges haven't boosted the yen purchases, however. USD/JPY has been fluctuating around the 80 level for three consecutive weeks, with the amplitude of 35 points in both directions. Now trading is held at the upper boundary of the range. Looking from the broader perspective (starting with the second half of March), we see that trading is still within the descending trend, but there is a risk that this tendency will be broken today. Or we'll see large-scale sales of dollars for yens.
