US Dollar continues to fall. The Swiss Franc, Euro, Yen and Pound are rising.

[RTFX-Trading]

US Dollar continues to fall. The Swiss Franc, Euro, Yen and Pound are rising.

What’s new?
United States: US bank regulators close BankUnited.
United Kingdom: April retail sales up 0.90%.
United Kingdom: Standard & Poor’s lowered its outlook on UK to negative.
Euro zone: PMI increases in services and manufacturing.
Germany: PMI increases in services and manufacturing.
France: PMI increases in services and manufacturing.
Japan: Status quo on interest rates at 0.10%.
General Motors: the Treasury not yet prepared to put the group into bankruptcy.
United States: the Treasury injects $ 7.5 billion in GMAC.
United States: labor market continues to suffer.

Today:
10h30 United Kingdom: GBP Q1, exp -1.9%, previous -1.90%.
14h30 Canada : Retail Sales M/M March, exp 0.50%, previous 0.20%.
14h30 Canada : Retail Sales excluding autos M/M, exp -0.10%, previous 0.60%.

Overnight Rates & Indices:
EURUSD: 1.3955 – 1.3890.
USDCHF: 1.0936 – 1.0894.
GBPUSD: 1.5898 – 1.5833.
EURJPY: 131.49 – 130.73.
USDJPY: 94.48 – 93.86.
DowJones: 8'292 -1.54%.
NASDAQ: 1’695 -1.89%.
S&P 500: 888 -1.68%.
Nikkei: 9’191 -0.79%.
Gold: $952

Comments:

Recently, a fall in markets resulted in a decrease in "carry trades" and a rising U.S. dollar, which is considered a safe haven. I noticed that yesterday, this correlation disappeared. Is the dollar losing its status of safe haven? My feeling is yes (and I've never really understood why investors may see the greenback as a safe haven currency...). The market seems to have turned to a currency that has almost always enjoyed a safe haven status, which is the Swiss Franc, which reached a high for over four months against the dollar.

Another new burden on the US dollar is the bankruptcy of BANKUNITED Financial established in Florida. BANKUNITED, which had $ 13 billion in assets and $ 9 billion of deposits, is the largest bank failure since the beginning of the year in the United States. This failure will cost the insurance fund FDIC around $5 billion. The lowering of growth forecasts for 2009 and 2010 by the Fed also weighed in on the greenback.
    
The trend is still dollar bearish, as we indicated in our RTFX-Trend. Fears that the United States may need to take measures to avoid loss of its Triple A rating, refusal of the opposition party of Japan to buy US government bonds denominated in dollars and the statements of China that it may abandon the dollar, suddenly re-surface (See our news of 14 May 2009).

Have a nice week-end.

Emman Xuereb
RTFX Ltd
Head Office

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