April US Consumer Confidence index which was expected to go up to 29.5 from 26 in March following the preliminary release of April University of Michigan Confidence index which came which came better than the market expectations of 58.5 at 61.9 has come strongly higher at 39.2 which can show an improvement of the consuming pace in US which can indicate that the worst is really behind of us. This figure can help the equity market to get back in green after its red opening today which can increase the greenback loses.

The single currency could get back some of its lost ground versus the greenback getting above 1.3 again after the release of the germane CPI which came slightly better than expected at .7% y/y and unchanged from March monthly and the market was waiting for .8%y/y  and .1%m/m.

The single currency was suffering recently from the weak inflation rates in the EU which can open the door to the ECB to cut the key interest rate in the eurozone further and taking untraditional easing stimulation steps to spur the current cooled invetments. The market is waiting for the ECB to adopt the quatitive easing policy which can increase the inflation preassure as what has been mentioned by the ECB president Jean Claude Trichet on 2 april meeting downplaying the deflation risks in the Eurozone but these current low inflation rate can help the ECB to take this step which can be by buying eurpean bonds for affording liquidity to the european governements to spend further and helping the ailing economy in the next ECB meeting in the 7th of next month and the single currency can be under pressure if he elevated the ECB appreciation of the deflation risks in this coming meeting.

The equity market changes could control the forex market again today after pushing  greenback lower in the beginning of yesterday US session when the stocks  crept up and giving it back these loses  by yesterday red closing of the US equity market. The greenback and the Japanese get use of the dovish market sentiment times of the stocks holding and taking risks as the investors unwinds their carried trades positions in favor back to the low yielding currencies. The USDJPY is still trading below 97 trading at 96.5 after bottoming out at 95.7 earlier today.

Best wishes

FX Consultant

Walid Salah El Din
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