Dollar mixed as Greece remains in the spotlight

The dollar was mixed across the board and softer against the euro ahead of this week’s Greek austerity vote and amid soft U.S. economic data. The euro was given a boost earlier by comments from Chinese Premier Wen Jiabao that China will continue to support Europe. This stance has been made clear in the past and lacked specific details of the nature of support. The common currency was also supported by the beginning of talks on debt rollover. French Finance Minister Lagarde announced that the government has a first draft for a deal with French banks on Greek debt rollover. EUR/USD rose to current levels of around 1.4280.

In the U.S., personal spending for May was flat from the prior month which was seen as a disappointment as the market was anticipating growth of +0.1% (prior +0.3%). May personal income was also slightly lower than forecast with a print of +0.3% (cons. +0.4% prior +0.3%). Regional Fed data surprised to the downside with Dallas Fed Manufacturing Activity for June coming in at -17.5 from the previous reading of -7.4 (cons. -3.2). The data was the latest in a stream of disappointing U.S. economic data which highlighted a soft patch in the recovery.

U.S. equities rallied with the Dow Jones Industrial Average finishing the day up by about +0.91% while the S&P 500 rose by around +0.92%. Commodities traded softer with crude oil falling slightly by around -0.64% while gold was down about -0.43% and silver declined roughly -2.06%. U.S. 10-year Treasury yields rose sharply by about 6 bps to around 2.93% as the Fed prepares to end its asset purchase program at the end of this month.

On the data front for the upcoming Asia/Pacific session are Japan’s retail trade figures and a speech by New Zealand Prime Minister Key as well as the RBA’s Debelle.

Source: Forex.com

27.06.2011