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10 Second Summary
Concerns remain centered on Greek and Spanish banks. Equity markets were driven down by macro trades based upon contagion fears in Europe. The European political gridlock is likely to further drain the Pacific energy today.
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Australian Dollar
The AUD is crushed further down under the European weight. Fears of an EU collapse saw the Aussie being sold down towards the mid 98USc levels. The technical correction induced rebound is unlikely to hit the Aussie shores today. Importers should remain vigilant for any 99USc seen on the board during today’s Asian session, as the AUD is likely to spend the weekend hibernating in the 98USc region.
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United States Dollar
Manufacturing in the Mid-Atlantic States unexpectedly contracted from 8.5 to -5.8 in May, while jobless claims remained steady at 370k. This data further cemented the Dollar’s global dominance. With risk skewed significantly to the downside the Greenback will continue living like a rock star partying throughout the weekend.
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Euro
Greece's rating already categorized as ‘Junk’ was pushed further down by Fitch from B- to CCC. Undercapitalized banks have given sleepless nights to policymakers. Spain now stands the risk of losing access to debt markets and could be the next of the member states to be sent to the guillotine. Given this heightened activity it isn’t surprising that investors’ have continued to sell the Euro down towards extinction.
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Japanese Yen
Bolstered by safe haven bids, the Yen continues to stay on the top of the leader board. The lure of risk free assets was too strong for any government backed JPY devaluation calls. The ‘Rise of the Yen’ will continue to play at the FX theaters throughout the weekend.
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New Zealand Dollar
Euro fears drove investors towards bonds, keeping the Kiwi pinned down at its low lying support at the 76USc level. Analysts are continuously broadcasting that the NZD is oversold, but bargain hunters remain far from enticed. The Kiwi’s knight in shining armor is still a few days away. Till then importers should look at purchasing on any intra-day peaks around the mid 76USc level.
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