Daily Forex Fundamentals – May 7, 2012

What’s on the Economic Horizon

Fresh off the press: Australian building approvals and retail sales
Swiss foreign currency reserves and CPI reports on tap
Euro zone investor confidence index to inch lower
Canadian building permits said to fall 0.5%

U.S. Dollar (USD)

Risk aversion is back in style, baby! The U.S. NFP report gave a very poor showing last Friday, leading traders to ditch higher-yielding currencies and buy up safe haven assets such as the dollar. For instance, EUR/USD ended the day 64 pips below its opening price at 1.3089. And to start the week off, the pair gapped down by another 54 pips! Does this mean the dollar will continue rising? Read more…

Euro (EUR)

Yowza! After dropping 64 pips on Friday to close at 1.3089, EUR/USD has gapped down over 50 pips and is now sinking below the 1.3000 handle! Could this be a sign of more losses for the shared currency this week? Read more…

British Pound (GBP)

The pound marked its fifth consecutive day of losses against the U.S. dollar as traders weren’t in the mood for risk at all. GBP/USD slipped below the 1.6200 handle and closed at 1.6151 while GBP/JPY suffered nearly a hundred-pip loss as it closed 5 pips below the 129.00 handle. Read more…

Japanese Yen (JPY)

Thank you, NFP! The disappointing labor market report from the U.S. led to massive gains for the yen, as it triggered a broad-based case of risk aversion. Yen pairs all around dropped like lead weights, and most even recorded huge gaps over the weekend. How will the BOJ react to all of this? Read more…

Canadian Dollar (CAD)

With risk aversion in full tow last Friday, USD/CAD broke out of consolidation mode and hit its highest level in two weeks! USD/CAD rose 67 pips to finish the week at .9955. Will risk aversion continue to drive the pair higher, or can the Loonie make a comeback? Read more…

Australian Dollar (AUD)

Jot Friday down as another negative day for the Aussie, folks! With the RBA’s dovish monetary policy statement pinning AUD/USD to the ground (and risk aversion dragging it even lower!), the pair really had no chance of lifting off! At the end of the New York session, it closed at 1.0185, down 75 pips on the day. Read more…

New Zealand Dollar (NZD)

What a drop by the Kiwi! NZD/USD broke below its previous lows around .8050 and even crashed to a low of .7938 on Friday as risk aversion, combined with bleak jobs figures from New Zealand, dragged the pair down. How low can it go? Read more…

Swiss Franc (CHF)

Woah! Did you see how the Swissy got clobbered by the Greenback last Friday? USD/CHF broke out of its range and soared past the other week’s high of .9173. The pair even gapped higher over the weekend as it opened at .9216. Will the Swissy be able to recover today? Read more…

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