market commentry 6-8-8
Sunday, June 8th @ 9:52 PM
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Let's take a look at last week's price action and what's in store for us this week.
In last 2 days the dollar was pressured against mainly Euro and that reflected in other crosses as well.
2 reasons:
1) ECB chief Trichet was really hawkish on Thursday when they announced interest rate. He said it's possible that they'd raise rates next month.
2) US unemployment rate was worse than expected and that nullified Ben Bernanke's dollar supporting remamrks last week. Bernanke had said Fed are watching Dollar exchange rates with inflation in mind and that Fed is pretty much done cutting rates. There is a possibility that Fed will undo some of the rate cuts to combat inflation but the unemolyment rate dampened this expectation.
There was a strong reaction in equity markets of this negative data and it might carry over to global markets. If that happens, Yen crosses would go down(Yen will strengthen).
Canada is announcing interest rate this week and they are expected to cut rate by 25 basis points. That would create some opportunities in CAD crosses with weakening CAD.
Let's see how things go over next few sessions.
Good luck
Kaustubh
