Euro relief rally continues

Canadian dollar – Despite a report showing that the monthly growth rate for the economy was unchanged through April the Canadian dollar advanced. The warmer risk waters made sure of that and besides, economists had predicted a minor decline for GDP output following the Japanese turmoil one month earlier. The unchanged reading means the Canadian economy grew at an annualized 2.8% pace led by a jump in metal ore and coal mining. The government said that retail and wholesale trade also rose. The loonie advanced to $1.0350 U.S. cents and the highest level in three weeks after the reading.

U.S. Dollar – Relief for Greece and with hopes running high for a bond settlement to be announced in Berlin, the dollar is still feeling heavy. Its index shed almost another 0.5% on Thursday and appetite for the dollar was further dulled by a sloppy reading for weekly initial claims. The jobless count eased by a mere 1,000 to 428,000 claimants but not only did the reading of continuous claims come in higher than forecast, but previously recorded data was also revised higher. The likely rate increase in Europe next week is also playing a role in maintaining a depressed dollar in the sudden absence of negative economic commentary.

Aussie dollar – The Aussie continued its rise as European tensions eased while a boost in credit during May helped remind dealers that the economy has been in decent shape. The Aussie traded to as high as $1.0750 U.S. cents after private sector credit rebounded by 0.3% last month leaving the annual pace of expansion at 3.1%.

Japanese yen – The yen rebounded against the dollar again overnight following strengthening reports on construction. Japanese housing starts increased by 6.4% year-on-year in May from a virtual standstill in April. Meanwhile construction orders were 25% higher in May than a year ago. The yen strengthened pushing the dollar down to ¥80.31.

Andrew Wilkinson is a Senior Market Analyst at Interactive Brokers LLC

Note: The material presented in this commentary is provided for informational purposes only and is based upon information that is considered to be reliable. However, neither Interactive Brokers LLC nor its affiliates warrant its completeness, accuracy or adequacy and it should not be relied upon as such. Neither IB nor its affiliates are responsible for any errors or omissions or for results obtained from the use of this information. Past performance is not necessarily indicative of future results.

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About the Author
Andrew Wilkinson

Andrew is a seasoned trader and commentator of global financial markets. He worked for several London-based banks trading cash and derivatives before moving to the U.S. to attend graduate school. Andrew re-joins Interactive Brokers following a two-year stretch at a major Wall Street broker-dealer as their Chief Economic Strategist. His coverage of stocks, options, futures, forex and bonds regularly surfaces in global media, and over the last several years Andrew has made many TV appearances on Bloomberg, BBC, CNBC and BNN and Yahoo Finance.

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