Last week’s Dollar gains pared in early European trade
May 30th - With UK and US markets closed yesterday, newsflows were somewhat limited and currencies struggled to find any real direction although early in today’s European session the dollar is finding itself under a degree of pressure. Friday’s reaction to the Michigan consumer sentiment reading does seem to have been rather overdone, so US consumer confidence data for May due later in the session can expect to be closely watched. Any shortfall here may serve to lock in recent gains by the likes of the Euro and Pound, although with the usual raft of month-end data due tomorrow volatility can be expected to continue in the near term. The Yen has also posted some modest gains through the Asian session after a run of Japanese economic data underlined that – on balance – the country’s recovery is continuing. However, household spending declined for the 4th consecutive month and again this is likely to lead to further questions as to whether the market can yet cope with a tightening of monetary policy. It may be a short week, but with data and the usual month-end position keeping, there’s plenty around to ensure a degree of volatility prevails in the days ahead…
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