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German economics minister Habeck stated that the EU is still looking for an overall embargo on Russian oil, but may seek alternatives in coming days if no agreement can be reached. The Euro pushed sharply higher after Thursday’s European open with a move to highs near 1.0725 as the dollar was subjected to wider selling pressure. There was choppy trading with German and French markets closed for holidays.

US initial jobless claims declined to 210,000 in the latest week from 218,000 previously and slightly below consensus forecasts while continuing claims increased to 1.35mn from 1.32mn. The first-quarter GDP estimate was revised down to -1.5% from the first estimate of -1.3% despite an upward revision to consumer spending.

The Kansas City Fed manufacturing index retreated to 19 from 28 previously which provided an element of relief given that some regional surveys have registered notable weakness, but there were still reservations over the outlook as companies warned over the impact of high inflation.

After gaining some relief into the New York open, the dollar lost ground again into the European close with some further speculation that the Fed may not to tighten policy as aggressively as expected previously. There was also some tentative evidence that longer-term inflation expectations were stabilising

The Euro edged higher to 1.0725 at the European close with net gains on most crosses. Markets will be wary over position adjustment on Friday with month-end rebalancing also having a significant impact. Although the Chinese yuan weakened, the dollar overall lost ground amid a move beyond peak Fed hawkishness with the index at a fresh 1-month low. The Euro maintained a firm tone with the currency strengthening to fresh 1-month high around 1.0765 before fading.  




Bank of Japan Governor Kuroda stated that the easy monetary policy must be maintained in the short term, but when the time comes the central bank will debate its exit strategy and lay out its plans to the public. He added that the most likely outcome is a balance between rates hikes and a reduction in the balance sheet. Although monetary policy will remain very accommodative in the short term, the comments from Kuroda triggered limited net gains for the Japanese currency.

US Treasuries were confined to relatively narrow ranges in early US trading with yields still slightly below Wednesday’s levels and close to 6-week lows.

Wall Street posted strong gains which limited potential yen support on defensive grounds and the dollar recovered to 127.25 against the Japanese currency.

The Chinese central bank weakened the yuan on Friday and there were further concerns over the domestic economic outlook, although the on-going plans to lift restrictions in Shanghai on June 1st continued to provide an element of relief with hopes that the domestic outlook could stabilise.

The dollar retreated to below 127.00 on Friday amid a wider retreat with the Euro advancing to near 136.50 before fading.




According to the latest ONS data there was a dip in UK credit and debit card spending in the latest week, but there was also a strong increase in job ads. The data is not seasonally adjusted, but markets remained wary over the outlook for consumer spending and the wider economy.

Chancellor Sunak announced a total support package of £15bn to provide support to ease the cost of living crisis and surge in energy costs. As well as universal support measures, there will be additional support for low earners. The support for will be financed in part by a 25% tax on excess profits on the energy sector. The fiscal support will potentially give the Bank of England increased scope to raise interest rates to curb inflation pressure. Sterling had, however, posted net gains into the announcement and hit resistance close to 1.2620 against the dollar. It also failed to hold the gains with a quick retreat back below 1.2600 and lows near 1.2550.

Stronger equity markets provided significant net support for the UK currency with a move to 1.2580 at the European close, but the Euro posted net gains to 0.8525.

Sterling posted further gains on Friday with fresh 1-month highs just above 1.2650 against the dollar before edging lower while the Euro edged lower towards 0.8500.




The Swiss franc overall was little changed during Thursday with a potential loss of defensive support given the gains in equity markets offset by further speculation that the National Bank would shift to a less expansionary monetary policy and could move to a rate hike as early as June.

The Euro secured a limited net advance to just below the 1.0300 level while the dollar retreated to test support below 0.9600. Global moves dominated on Friday with the dollar dipping to fresh 1-month lows around 0.9565 before a tentative recovery to 0.9580.

Technical Levels 

Calendar Levels 



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