- Eurogroup finance ministers to meet in Brussels Sunday afternoon to finalize details of Greek aid package
- US GDP rises 3.1% in Q1, consumer spending improves, inflation low
- Canadian GDP rises 0.3% m/m in Feb
- Chicago PMI rises to 63.1 in April from 60.5 in March
- University of Michigan consumer sentiment 72.2 in April from 73.6 in March
- S&P 500 slides 1.7% on Goldman Sachs criminal investigation report
- Oil rises 1% to $86. Gold reaches $1180 amid Greek uncertainty
EUR/USD was quite choppy in US trade today, rallying as high as 1.3343 in NY morning trade, supported by talk of massive month-end demand for EUR along with optimism that the EU and IMF will unveil an aid package that is sufficient to tide Greece over for the next three years.
Central bank sales above 1.3335 helped slow the EUR/USD rally and helped set the stage for a sharp dip to 1.3255 after the month-end fixing passed. Many were long front-running the fixing and had to scramble for the exits late. EUR/USD rebounded toward 1.3310 in the afternoon and stayed there into the close.
USD/JPY was whippy as well today. It rallied as 94.59 after the upbeat US GDP report but it was soon knocked down by aggressive selling from a US investment bank. We fell on risk aversion as stocks slipped sharply in the afternoon but support at 93.85 held fast. Dealers suspect Kampo remains on the bid on dips. Stops are seen just outside either end of today’s range.
USD/CAD was boosted by rumors of a good size impending M&A transaction and well as a weaker than forecast GDP report for February. Hopes for a quick BOC rate hike continue to fade.
Cable was undermined by the usual month-end demand for EUR/GBP as the UK makes an intergovernmental payment to the EU. EUR/GBP rallied a cent from 86.25 to 87.25 before easing to close at 0.8700. Cable fell as low as 1.5253.
All eyes will be in Brussels Sunday afternoon for details of the Greek package. “Shock and awe” (a very large package) is likely needed give the euro a sustained boost. Stops lie above 1.3380 and 1.3405.
