Daily Currency Report

Overview

The dollar weakened yet again against the major currencies in spite of a second day of strong economic data.

GBP
Data releases showed that UK GDP expanded a further 0.6 per cent. The Nationwide April House price index showed that British house prices were up only 0.1 per cent. This below-expectation data caused the pound to fall to a three-week low against a strong euro although it remained fairly steady against the dollar.

USD
The dollar continued to weaken against major currencies despite strong economic data released. Part of the dollar's lack of strength was due to nerves ahead of the testimony to Congress by Ben Bernanke, chairman of the Fed. The market will be focused on any comments regarding future moves in interest rates.

EUR
The euro may strengthen on speculation the ECB will raise rates at a faster pace than the Fed. He intimated that the Central Bank will increase borrowing costs in June should economic growth accelerate.

JPY
The Asian session delivered little in the way of direction although there is a host of Japanese economic numbers expected including CPI and household spending.

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