EUR/USD
The French economy will expand less than President Francois Hollande’s government expects this year and unemployment will climb as consumer spending and exports fail to accelerate, the national statistics office predicted. The remarks show how Hollande is struggling to revive Europe’s second-largest economy after two years in office. The Socialist president has pledged to cut public spending by 50 billion euros ($68 billion) over the next three years and halt tax increases in an effort to bolster confidence and investment. The French economy will expand less than President Francois Hollande’s government expects this year and unemployment will climb as consumer spending and exports fail to accelerate, the national statistics office predicted.
GBP/USD
Sterling weakened from near the highest level in more than five years versus the dollar, there’s scope to absorb more slack in the economy before the central bank’s benchmark rate climbs from a record-low 0.5 percent. The pound fell versus 13 of its 16 major peers after Bank of England GovernorMark Carney said wages weren’t rising as quickly as the central bank anticipated, Sterling’s “The U.K. economic recovery appears to be taking hold and ultimately tighter monetary policy” and a stronger pound appear likely, the strategists wrote. “However, all that information appears to be priced into the currency pair.” No recent positive data have triggered “an accelerated move higher through resistance,” suggesting the currency may be “overbought,” Resistance denotes an area on a price chart where sell orders may be clustered.
USD/JPY
Yen was little changed at 101.94 per dollar. The plan, which was little changed from previous drafts, has Japan cutting corporate taxes from fiscal year 2015, with the aim of lowering the rate to below 30 percent in a few years. Other measures include creating a corporate governance code and increasing the number of foreign workers in the nation. The contrast between the Bank of Japan’s reduction in longer-maturity bond purchases and the Ministry of Finance’s increased issuance is driving investors away from the super-long government debt. The BOJ’s holdings swelled to 20.1 percent of outstanding sovereigns in the first quarter, making it the largest investor in the market for the first time in data going back to 1997.
USD/CAD
The consumer price index rose 2.3 percent in May from a year ago following April’s 2 percent pace, energy costs climbed an annual 8.4 percent for the second straight month. While inflation last month exceeded the central bank’s 2 percent target for the first time in two years, reflected in flat or falling prices for durable goods such as televisions, gives Bank of Canada Governor Stephen Poloz scope to extend the longest rate pause since the 1950s -- an era when children inherited television sets from their parents. Canadian dollar was little changed.
