EUR/USD
Germany and France are seeking to ease the euro area’s deficit rules to reflect efforts by governments to fix their economies, Europe’s two biggest economies will present a proposal to the next European Commission to allow countries such as France, Gabriel told reporters after meeting French Economy Minister Arnaud Montebourg in Toulouse, France, Germany is set to run a deficit close to zero for a third straight year in 2015, the European Commission said on May 5. France will show a deficit of 3.9 percent this year and 3.4 percent in 2015, according to the Commission. The currency dipped to $1.3503 on June 5 after the ECB became the first major central bank to take one of its main interest rates negative. The $1.35 level is also just above this year’s low of $1.3477 set in February. A drop below that threshold would presage further losses, strategists say, while a sustained inability to breach it would open the door to a rally. The 18-nation euro has weakened 0.7 percent in June and 1.5 percent this year, and is down more than 3 percent from a 2 1/2-year high of $1.3993 reached on May 8.
GBP/USD
The pound reached the strongest level. Sterling traded above $1.70 for the first time since 2009. BOE officials have acknowledged the dangers. Deputy Governor for Financial Stability Jon Cunliffe has said it would be “dangerous” to ignore the momentum, while fellow policy maker Ben Broadbent said last week that housing is a risk to the economy. The currency posted its biggest weekly gain in four months Two-year government bonds fell, reducing the yield difference with 10-year gilts to the least in almost a year. The pound was at $1.6985 after rising to $1.7011, the highest since Aug. 6, 2009.
USD/JPY
The Bank of Japan’s unprecedented asset purchase program has released a creeping paralysis that is freezing government bond trading, constricting the yen to the tightest range on record and braking stock-market activity. Asset purchases have not only made BOJ Governor Haruhiko Kuroda the biggest player in Japan’s $9.6 trillion bond market, they have also given him the most leverage over currency and equity markets in the world’s third-largest economy. Kuroda last week refrained from either expanding or reducing monetary easing that drove the yen to its biggest annual loss in more than three decades, Forty-two percent of economists forecast Japan’s central bank will expand monetary stimulus in October,yen was little changed.
USD/CAD
Canadian consumer confidence fell to the lowest in 10 weeks amid rising gasoline prices tied to escalating violence in Iraq Canada Mortgage & Housing Corp., the country’s housing agency, reported last week that new home building in May was at the strongest level in seven months as the industry rebounded from the impact of a harsh winter. The Canadian Real Estate Association reported today the nation’s realtors recorded their biggest gain in sales in almost four years last month as the industry rebounds from the impact of a difficult winter. Canadian realtors recorded their biggest sales gain in almost four years last month, the Canadian Real Estate Association said today, as the industry rebounds from the impact of a difficult winter.
