The US dollar continues to languish near recent lows against most major currencies. Trade in the overnight session was calm after first quarter GDP figures showed an expected slowdown in the pace of US economic expansion. After the initial reaction, further dollar losses were minimised by the market holiday in Japan. With Japan on holiday for most of next week, trade in the FX market dipped and is expected to remain thin with UK markets also closed till on Tuesday for public holidays. In fact the UK royal wedding is likely to divert quite a bit of attention away from trading desks. Prior to the wedding, investors will see a flurry of eurozone data, which will set the tone for the euro headed into next week’s European Central Bank MPC meeting.

US dollar

The US dollar saw renewed selling pressure after first quarter GDP data was released. Growth in the first quarter came in at 1.8 per cent, which was more or less in line with expectations for a slowdown from the 3.1 per cent seen in the prior quarter.

Sterling

Liquidity in sterling is likely to be very thin as markets in the UK will be closed until Tuesday for the royal wedding and a bank holiday.

EUR

The euro continues to hold onto gains against a weakened dollar and has taken back losses against sterling. Economic data released showed German import prices rising, while the total of those unemployed on a seasonally adjusted basis in Germany fell to 2.97 million. The data supports a more hawkish stance from the ECB, despite the drop in consumer spending seen in France.

JPY

The Japanese yen saw extremely little trade in the overnight session as markets were closed for a public holiday. Japanese markets are closed for Tuesday, Wednesday and Thursday of next week as well.

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