Euro And British Pound Rose Amid US Dollar's Weakness

Market Reviews

The US dollar and Japanese yen are trading as the weakest major currencies. Global stock markets increase. DAX gained 0.25%, when the CAC increased by 0.33%. US stock markets are also expected to open higher. Italian 10 year bond yield fell by 0.17 so far and is standing at 2.54. German 10 year bund yield rose by 0.16 and is back above 0.40.

The euro rose against the background of a weak US dollar, despite the poor data on the Eurozone Sentix Investor Confidence index. Meanwhile, easing of political situation in Italy and Spain also contributes to the growth of the euro. Eurozone Sentix Investor Confidence fell to 9.3, well short of the estimate of 18.6 points. Eurozone Producer Price Index dropped to 0.0%, shy of the estimate of 0.1%. The last time that the indicator failed to post a gain was in August 2017.

The British pound rose against the dollar, coming close to an important mark of $1.3400 amid good data on the index of business activity in the construction sector of Great Britain for April. The UK construction PMI was unchanged at 52.5 in May, above expectation of 52.0.

The Australian dollar stays supported by positive economic data. According to the Australian Bureau of Statistics (ABS), retail sales rose 0.4% in April, seasonally adjusted after a zero change in March, exceeding growth forecasts by 0.2%. Company gross operating profits grew 5.9% qoq and 5.8% yoy seasonally adjusted in Q1. Wage growth slowed to 0.8% qoq seasonally adjusted and 5.1% yoy.

On Tuesday, the results of the next meeting of the RBA on monetary policy will become known, while experts expect that the interest rate will remain at a record low level of 1.5%, where it is located since mid-2016. This will be the longest period of the unchanged monetary policy of the Reserve Bank of Australia since 1990.