Market News

There were no surprises when Australia’s Central Bank Governor Glenn Stevens and his board left its key interest rate unchanged Tuesday at a record low of 2.0. Despite the decision, the Australian dollar continued to rise.

As had been largely expected, the Greek government was unable to meet a deadline for an agreement with lenders to release additional aid. Without that funding, it is highly unlikely that Greece will be able to make its next IMF payment which comes due on June 5th.

Greece is no closer to reaching a deal with its creditors with each side pointing to the other as the reason for the failure.

There is quite a lot of data coming out this week, which should be dominated by USD news (in particular, Friday’s NFP report) and also to a lesser extent statements by the central banks of the Eurozone, the U.K., and Australia. However it seems very unlikely there will be any surprises from the central banks so all eyes will be on the USD data.

Data released on Friday showed that the U.S. economy contracted in the first quarter of the year but despite the drop on Wall Street, indexes still posted gains for the month.

Chinese shares came back slightly on Friday after plunging drastically the day before, but couldn’t prevent investors from remaining skeptical that the equity market was turning around.

Investors, speculating that interest rates in the United States are likely to rise higher this year, helped to push the U.S. Dollar to a multi-year peak versus the Japanese Yen.

Australia released its business capital expenditure (CAPEX) report Thursday and it wasn’t promising.

The US Dollar eased back versus the Japanese Yen and the Euro after a short bout of investor profit taking which came in the wake of improved US data. That economic data had gone a long way to help restore some waning confidence in the greenback.

When Federal Reserve Chair Janet Yellen reiterated her expectations to raise interest rates this year for the first time since 2006 she put smiles on the faces of her peers at central banks around the world.

Last week’s release of inflation data helped to push the US Dollar Index higher and lifted the greenback to an 8-year peak versus the Japanese Yen.

Crude oil seems to be making a comeback. With prices rebounding significantly over the last few weeks, traders are jumping back in with expectations of continued gains.

With all the talk by Fed Chairwoman Janet Yellen and other Fed officials that interest rates will be raised by the end of the year, Federal Reserve Vice Chairman Stanley Fischer seems to be taking a different approach, believing that there is a risk to raising interest rates prematurely.

Although the Forex market is open all week, Monday is a public holiday in both the U.K. and the U.S.A., as well as most of the rest of Europe, so it should be a very quiet day.

Japan’s economy is moving at a quicker pace than anticipated. Data released Monday revealed that April exports climbed 8.0 percent from a year earlier, beating expectations and highlighting a steady recovery in export demand.