The greenback has suffered today across the broad from the increased risk apatite of the investors hoping for a closer recovery from the current recession. S&P 500 could get over this year loses closing above 900 at 907 and the Dow could accelerate its gains reaching 8426 at the close of today US session and the question to how far this can continue has been subsided and forgettable again today on the current impetuous cheeriness.  

The European markets are expected to follow the US bullish closing today underpinning the single currency which may have just .25% interest rate cutting ECB decision later this week with no further easing measure as widely expected as the same as last meeting on the second of last month with an elevation of the deflation risks over the short term.

The single currency could get benefits from this increased risk apitite versus the greenback last week edging above 1.33 after its recent suffering from the low level of inflation and the increased probability of deflation which can enable ECB to cut the key interest rate in the eurozone further and taking untraditional easing stimulation step forward in its current easing policy to spur the current cooled invetments by adopting the quatitive easing policy which can be by buying eurpean bonds for affording liquidity to the european governements to spend further and helping the ailing economy following US but this can increase the inflation preassure as what has been mentioned by the ECB president Jean Claude Trichet on 2 april meeting when he downplayed the deflation risks.

The release of April ISM Manufacturing index which came better than expected at 40.1 could keep the optimism which contained the market sentiment that the contraction is at a slower pace currently saving last week gains of the equity market and giving a strong technical opening of this week which is carrying by god's will, many important data like the release of April US ISM non-manufacturing index today which is expected to improve to 42 from 40.8 in March and also the US labor report of April by the end of it, As the market is looking for a slower pace of lying off too as the unemployment current pace can undermine the consuming sentiment which have improved recently as we have seen US April US Consumer Confidence index which was expected to go up to 29.5 from 26 in March coming better than expected at 39.2 following the preliminary release of April University of Michigan Confidence index which came better than the market expectations of 58.5 at 61.9 and the final reading came higher at 65.1 ensuring this improving.

Best wishes

FX Consultant

Walid Salah El Din
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