Daily currency report

Overview

Despite comments from EU’s Jean-Claude Juncker suggesting that Greece may not meet requirements in which to receive the fifth tranche of last year’s bailout funds, the euro has strengthened against the US dollar and sterling, but fell to record lows against the franc. The move represents dollar weakness in the aftermath of weaker than expected economic data. The Swiss franc managed to jump to record highs against the US dollar and euro as investors looked for safe-havens to park funds going into a long three-day weekend in the US and UK.

Sterling

For all the concern that the Bank of England shows for the UK consumer, the GfK consumer confidence release offers a bit of a surprise. The survey jumped to an 18-year high of -21 in May from -31 in the prior month. Good weather and public holidays seem to help. The data could potentially help to limit sterling’s downside against the euro and is already helping the pound higher.

US dollar

The US dollar is trading lower and taking the Canadian dollar with it because of the close ties the two economies have with one another. The US dollar fell under heavy selling pressure after economic data was released that failed to live up to expectations.

Euro

A fifth tranche of last year’s bailout agreement with Greece is not a guarantee without the promised progress that the country made to the IMF and EU Commission, and according to EU’s Jean-Claude Juncker, Greece may not meet its obligations, which puts it on a course towards default. However, never mind the comment and the path that Greece is on, that is not what markets are currently focusing on. The euro has jumped against the US dollar and sterling but is being weighed down by the safe have Swiss franc. Indeed, the upside for the euro must be limited given the dire situation.

Japanese yen

The Japanese yen has opened weaker against the last closing levels. The yen was not swayed by economic data that showed a positive CPI release for the first time in two years.

Travelex Global Business Payments Malta, freephone: 800 733 22, www.travelex.com/mt/

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