Monday was all about the re-pricing of risk. That’s not such a bad thing given that there were signs that markets were getting complacent once again. The VIX measure of equity market volatility is perhaps the best measure of this, in light of its liquidity. This was nudging below the 15.0 level towards the end of last month, a level that has not been seen on a sustained basis since the late 2006 and the early part of 2007 (and less than 0.5% of the time since September 2008). We …

After a good first couple of weeks of this month, Monday witnessed some profit-taking in the greenback. Other than dollar longs taking profit, a slight improvement in risk appetite and some market participants taking a more benign view of Greek developments, it was difficult to pinpoint any other particular rationale for the price action. Two major beneficiaries were the Swedish krona and the Swiss franc, both up a full 1%. The EUR, which in Monday’s Asian session briefly fell below 1.4050, slowly recovered to reach 1.42. News out of Brussels …

After an attempted claw back early yesterday, the euro came under sharp selling pressure again over the day and overnight as markets continue to focus on euro zone debt issues. Fears that problems in Greece could impact elsewhere, despite the best efforts of policymakers to try and keep the situation under control, pushed the single currency to a low of $1.4173 late yesterday. A modest bounce was seen early morning but downside risks remain near term as markets await communication from Europe on whether or not Greece will receive additional …

The pound remains weighed down by poor economic data, the political fallout within the coalition government from last week’s local elections and the resounding ‘No’ vote in the AV referendum and the growing realisation that the Bank of England’s Monetary Policy Committee look set to keep UK interest rates unchanged at the historic 0.5% low level well into 2012 to allow the UK economic recovery to withstand the austerity measures introduced by this government since their election in May 2010.
With the number of ‘growth market’ economies increasing interest rates to …

US jobs data came out much better than expected at 244,000 versus 190,000. This adds to the string of positive NFP results which started in late 2010 showing that employment is steadily growing in the US. Immediately after the announcement USD strengthened against the Pound and the Euro, however the trend reversed into USD weakness minutes later with EURUSD and GBPUSD being pushed to the highs of the day. Erratic moves are common after the NFP given it is one of the most watched figures and also because it is …

The euro fell across the board yesterday after the ECB left interest rates on hold and Trichet hinted that a rate rise at the bank’s June meeting was unlikely, disappointing those in the market who had been looking for a hawkish tone. After a sharp drop over the day the euro stabilised overnight, but still has some way to go to claw back all of its losses, with the dollar also supported by sharp falls in oil prices. Given Trichet’s more measured tone, it may remain under pressure near term …