The Dollar seems to be losing its status as a safe haven currency; “carry trades” sharply higher

[RTFX-Trading]

The Dollar seems to be losing its status as a safe haven currency; “carry trades” sharply higher

What’s new?
Japan: Unemployment at 5% in April, industrial production rebounds.
United States: Chrysler hopes for green light for Fiat’s takeover bid.
United States: GM presents a new offer in view of a smoother ride through bankruptcy.  
Crude oil: Rises above $65 per barrel at the end of NY meeting.
United States: New home sales increase by 0.30% in April.
United States: Durable goods rise 1.90% in April.
United States: Jobless claims eased to 623'000 last week.
Euro zone: Further improvement in economic sentiment in May.

Today:
08h00 Germany: Retail Sales M/M April, exp0.00%, previous -1.00%
08h00 United Kingdom: Nationwide House Prices M/M May exp -0.90%, previous -0.40%
11h30 Switzerland: KOF index May, exp -1.88, previous -1.86
14h30 United States: GDP Annualized Q1, exp -5.50%, previous 6.10%
14h30 United States: GDP Index Q1, exp 2.90%, previous 2.90%
14h30 United States: PCE index Q1, exp -1.00%, previous -1.00%
14h30 United States: Core PCE index Q1, exp 1.50%, previous 1.50%
15h45 United States: Chicago PMI index May, exp 42.0, previous 40.1
15h55 United States: University of Michigan confidence index May, exp 68, previous 65.1.

Overnight Rates and Indices:
EURUSD: 1.3998 – 1.3925.
USDCHF: 1.0860 – 1.0789.
GBPUSD: 1.5990 – 1.5918.
EURJPY: 135.18 – 134.45.
USDJPY: 97.01 – 96.25.
DowJones: 8'404 +1.25%.
NASDAQ: 1’731  -1.11%.
S&P 500: 907 +1.54%.
Nikkei: 9’471 +0.21%.
Gold: $964

Comments:
  
Renewed risk appetite for the "carry trades" due to rising raw materials and markets. The Australian dollar reached an eight month high to 76.40 against the Yen, the New Zealand dollar also reached an eight month high against the Yen to 60.80. The market believes that the worst of the crisis is behind us. The latest economic figures point in this direction, as well as "cleaning" of the U.S. auto market.
   
The euro, as well as Sterling, is the currencies most requested, while the dollar seems to be losing more and more of its safe haven status. Tension between North and South Korea is also weighing on the greenback. The dollar lost ground against the Yen, the USDJPY is down this morning at 96.50.

In terms of economic data, this should be a very interesting day which should confirm investor’s opinion whether or not the worst of the economic crisis is behind us (which I doubt ...).

Good Weekend

Emman Xuereb

RTFX Ltd
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