The increased risk appetite has hurt the greenback today fueling buying in the equities market causing selling off in US treasuries causing damage to the greenback from another side which caused weakness even versus the Japanese which was well-known as the first loser of the carry trades unwinding but this selling off beside the very low interest rate of the greenback too which stands below .25% could drag this property from the Japanese yen too. The technical breaking out of 1.372 single currency versus greenback has caused further stop loss orders triggering increasing the momentum of the greenback selling. The single currency could jump 1.3794 with first touch of 1.372. The European equities market are still following the current US bullish sentiment encouraged by the recent Germane ZEW release which came in a promising optimistic way above the market expectations of 10 at 31.1 in May.

Yesterday, The release of May US NAHB new home have increased to 16 from 14 in April showing an improving of the housing market in US. The figure was the best of this year which could help the stocks market to continue its rally yesterday but today the release of the US housing starts of April can weigh on the equity market performance and the risk appetite of the investors again as they slumped to 458k y/y and they were expected to be 520k from 530k in March. The building permits staged lower than .500M at .494M m/m and the market was waiting for improving to .530M from .510M came in March. The data show that the recovery is smooth and gradually and the consuming sentiment is still struggling.

This morning we have seen how the European equities market could follow the US bright closing yesterday and the encouraging release of the Germane ZEW which came in a promising optimistic way above the market expectations of 10 at 31.1 in May.

The risk apatite has improved today with the beginning of this week after last week correction which supported the greenback. The key driving of the forex market is still the equity market change. The stock market has been underpinned by the market believe of the banking sectors abilities to recover pushing the banks stocks higher bringing back the confidence to the business investment.

The Japanese yen has suffered from taking risk back again after a strong opening this week reaching 94.5 versus the greenback. Both of the Japanese yen and the greenback are well-used as funding currencies of the carry trades transactions because of their very low yielding across the broad. The currencies market focusing on this property is still controlling of the changes of it from the beginning of the credit crisis until now ignoring the suffering of the other economies which are still lagged behind US.

The US Dollar is still underpinned by the current dovish market sentiment toward holding assets and taking risks in the recent 2 days. The US equities markets have been suffering a profit taken wave dragged it down pushing the European stock markets and the Asian stock markets down after the recent optimistic rally which contained the market sentiment in the recent  weeks since the second week of March.

The market is waiting for a the results of this test after the rally and how much the equity market will be solid in the face of this profit taken holding these recent gains believing in a recovery can be this year.

Yesterday, April US retail sales figures were encouraging to take profit at this point as they have put doubts about the pace of consuming which can lead the demand and the growth back again.