EUR/usd
The single currency opened the day with a drop below 1.29, caused by the persisting political uncertainty in Greece. Apart from the Bloomberg's survey which forecasts the more than 50 % probability that “at least one country will leave EU by the end of the year”, some European officials already say that the consequences of this step are discussed at the summit level. As many times before, the deadline for the political decisions on Greece has been passed with no certain decision taken. The country still doesn't have the government. The ECB's Honohan said that “technically” Greece can disintegrate the euro, but it may damage the currency. Germany's Finance Minister Schäuble pointed out that none of those who demands austerity from Greece cannot make the country stay. The European Finance Ministers will meet today to discuss the fate of further tranches to Greece and the situation in Spain. We believe that the worst point of Greece's quitting is that it will severely damage the confidence in the banks and companies in other troubled countries like Spain and Portugal. Perhaps, even Italy will be affected. If officials are really weighing up the probable exit of one of the countries, they should, for a start, think over and agree on the mechanisms to assure the markets that this is really ‘an exceptional case'. As you remember, the attempt to make the markets believe that the Greek debt restructuring was this very exceptional case proved to be vain.
GBP/USD
The British pound has been gradually declining for two days. The level of 1.6180 became the starting point of sales in the currency after the upsurge on Thursday. The sterling has reached the strong support level of 1.6060 and is trying to break lower. On Friday bears already attempted to break this support, however the main battle seems to have been put off till today. Generally speaking, if we leave aside the political uncertainty in Europe, the most favourable day to act will be tomorrow. Today there won't be any vital statistics from Britain, while tomorrow the Trade Balance data are scheduled to be released. Thus, it's quite probable that today's movement, in either direction, will prove to be false. Speaking about the probable secession of Greece, Germany, in fact, demands that Britain should also incur the losses from Greece's exit. If true, it will have a pernicious effect on Old Lady's government assets.
USD/JPY
Despite the market decline and overall tendency to buy “safe” dollars, the yen surprisingly isn't in great demand now. Usually in the periods of capital flight to safety (or as we like to put it – to liquidity) the UDS/JPY pair declines. This is not the case now. The powerful forces are reversing the pair after a short stay below 80. Now UDS/JPY is trading a bit higher than the referred level. Position traders, who hold their positions for several days, may find buying of the pair on the dips below 80 gainful.
USD/CAD
The Canadian dollar has been quite volatile over the last two weeks. The unexpected decrease of GDP in February was followed by a rally in USD/CAD, which jumped from 0.98 above the parity. However, it's not all too bad in Canada. Judging by Friday's statistics, the market feels good. Following the stunning growth of 82.3K in March, the Canadian employment grew by 58.2K in April. Remember that Canada and the USA have a ten-time difference in population, yet the employment growth in these countries doesn't differ even by thrice. When the States start the upturn with the consumption growth, their Northern neighbours are the first to benefit from this.