Paris has rejected a last-minute concession over its cultural industries intended to overcome French objections to the formal launch of EU-US trade talks at the Group of Eight summit next week. At a meeting of EU trade ministers on Friday, Karel De Gucht, EU trade commissioner, offered the French government the right to challenge any offer he makes to the US affecting French film, television and music when the trade negotiations finally get under way. But a French official said that his government’s response to Mr De Gucht’s proposal was “negative”.
EUR/USD moved higher in a turbulent week, riding on dollar weakness and on a calming message from Draghi.
NZD/USD is currently trading at 0.8040 after having already fallen to .07759. It broke below the previous weekly low of 0.7820 and below the bottom of July 2012. The Kiwi follows the Aussie and other emerging market currencies and drops below 0.78 – the lowest levels since June 2012. This weakness could impact the rate decision and make the central bank more comfortable.
The Pound had a good week, gaining 240 points against the US dollar. British economic data looked good last week, as all three PMIs beat their estimates and all were above the 50-point level. The pound got an added boost from weak US employment numbers late last week, which sent the dollar broadly lower. Mario Draghi said there is no need for negative rates now and this certainly helped the euro. Together with a series of mediocre figures in the US, EUR/USD broke higher, but stalled at a key level. Germany continued to falter moving between positive and weak releases. German Factory Orders slumped 2.3% in April worse than expected while industrial output leaped.
USD/JPY showed some strong downward momentum as it fell by more than 300 points last week. The pair quickly dropped below the 100 line. The drop of the Nikkei index continues to push the pair to lower levels. As well, weak US employment numbers led to a broadly weaker dollar and the yen took full advantage and posted sharp gains.
Important announcements this week:
Monday & Tuesday:
* G8 Meetings.
Tuesday:
* Australia - Monetary Policy Meeting Minutes.
* Germany - ZEW Economic Sentiment.
* UK - Inflation Report Hearings and BOE Inflation Letter.
* USA - Building permits and Core CPI.
Wednesday:
* UK - MPC Meeting Minutes.
* USA - FOMC Press Conference.
Thursday:
* New Zealand - GDP.
* Europe - Eurogroup Meetings, PMI figures.
* USA - Philly Fed Manufacturing Index and Unemployment Claims.
* Switzerland - Libor Rate and SNB Monetary Policy Assessment.
Friday:
* Japan - BOJ Gov Kuroda Speaks.