Euro at Six-Week Low vs. Dollar

The euro slumped during this week, falling to the lowest level in six weeks against the US dollar, as Greece and its debt returned to the forefront of news and discussions, making speculators unwilling to invest in the shared European currency.

The theme of the Greek debt is again in newswires, worsening market sentiment and making investors stick to safer currencies, and the euro suffered because of it. The currency attempted to slow its drop on Tuesday and Thursday on anticipation of an interest rates hike by Europe’s central bank in June and as the reports showed that major economies of the European Union, including Germany and France, perform quite well. But all good signs weren’t been able to mute talks about the impact of the debt crisis in Greece and other indebted European nations on the economy of the EU, so the euro continued its one-way movement to the downside.

No Need for Safety, Swiss Franc Suffers

Commodities and global equities recovered today from the last week’s sharp decline, signaling that investors became less interested in safe assets. Such shift of market sentiment harmed the Swiss franc.

Concerns about the sovereign-debt problems of Greece and the whole European Union subsided somewhat after the spokesman for German Chancellor Angela Merkel stated that a restructuring of Greece’s debt wasn’t considered the EU official said the progress of Greece in fixing its economic issues is being studied. The Standard & Poor’s 500 Index rose 0.5 percent and the MSCI World Index gained 0.7 percent. The Thomson Reuters/Jefferies CRB Index of raw materials advanced 1 percent, following the 9 percent drop last week, the biggest decline since December 2008.

Euro Bulls Keep Hope Evens After ECB Rates Decision

The European Central Bank decided to keep its main interest rate unchanged, sending the euro down and frustrating euro bulls. Still, many euro supporters remained unfazed by this decision and hope for another rally of the currency.

Jean-Claude Trichet, President of the ECB, said on the press-conference after he left yesterday the minimum bid rate at 1.25 percent:

Based on its regular economic and monetary analyses, the Governing Council decided to keep the key ECB interest rates unchanged following the 25-basis point increase on 7 April 2011. The information that has become available since then confirms our assessment that an adjustment of the very accommodative monetary policy stance was warranted. We continue to see upward pressure on overall inflation, mainly owing to energy and commodity prices.

Forex: Aussie falls after slow down in sales

The Australian dollar had a violent downmove across the board after much worse than expected retail sales, down 0.5% in March compared to an expected +0.6%. The sell-off was somewhat contained by improved building approvals, which rose by 9.1% in March.

AUD/USD had a sharp decline of 60 pips to currently be pressing against 1.0700, 7-day low. AUD/NZD headed ferociously south, threatening now 1.3500 strong support. EUR/AUD spiked from 1.3800 to just break 1.3850. AUD/JPY crawled lower, finding support at 86.25.

US Dollar — Loser of the Month

The US dollar showed a monthly decline against all of its major counterparts on the Forex market in April, confirming its long-term downward trend even against the currencies closely connected with the US economy.

The greenback demonstrated the worst month against the euro since September 2010 and the worst month against the Great Britain pound since last July. It also managed to slid against the Canadian dollar, which wasn’t feeling great throughout April too. Of course, the US currency also dropped heavily versus such particularly successful April currencies as the New Zealand dollar and the Swiss franc.