FX Markets Lack Direction

Daily Forex Fundamentals | Written by AC-Markets | May 18 09 09:58 GMT |

Market Brief The Usd was mixed in the Asian session, as markets look uncertain of a direction. The EurUsd traded between 1.3440 and 1.3498, while the UsdJpy weakened to 94.60 in early trading before trading up to 94.45, as Europe opened. Economic data last week was mixed at best, with data probably confirming that economic contraction has bottomed out, yet meaningful recovery should not be expected in the near term. German GDP, which signaled a -3.8% decline in activity for the first three months of 2009, took the wind out of the Eur sails. Currently, the economic forecasts reflected in market pricing have overshot true conditions and a correction is highly likely. Following Europe, the US equity futures are pointing toward a negative open. In Japan, Moody’s unified Japan's ratings to Aa2, downgrading foreign currency JGB ratings from AAA but upgrading local currency ratings from Aa3. While in economic data Japanese consumer confidence came in slightly better than expectations at 33.2 vs. 31.2 exp and household consumer confidence also surprised to the upside 32.4 vs. 32.0 exp. The SNB has still not commented on Friday's spectacular EURCHF rally. In addition, official rhetoric recently showed the SNB moved beyond the usual threats of currency intervention and chose to provide more specifics on its recent operations, such as the foray into covered bonds. With a light calendar today in Europe and the US, markets will be debating the aspects of the global recovery and watching equity markets for direction. ACM FOREX Disclaimer: This report has been prepared by AC Markets (thereof ACM) and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Salesperson or Traders of ACM at any given time. ACM is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.