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Dollar bulls wait patiently for next leg higher

A long week end just gone will be followed by another for the celebrations of the orthodox Christian calendar which has particular significance for Greece as negotiations with Europe continue during another shortened business week. Last Friday saw just how volatile markets can be when major economic data is released on a bank holiday as we explained in our note ahead of the figure here. The nonfarm payroll was a disappointment for the dollar bulls who took quite a hit as the greenback was sold off and we highlighted the chance of a move back above 1.1000 for EURUSD, but the dollar has slowly been trying to fight back and we sit at 1.0920 at the time of writing. With the yield on the 2 year US Treasury back at two month lows the chances of a June hike from the Federal Reserve now look to be slim to none. Overnight the RBA surprised somewhat by not cutting rates from 2.25% which has given the AUDUSD a little boost, more so than the poor nonfarm figure last Friday, so we’re back trading at 0.7665 although the market now expects the rate to fall at their May meeting.

As well as keeping a watchful eye on Greece and Eurozone negotiations over the coming days, today is quite busy on the economic data front with services PMIs being released across Europe and the UK, then overnight the BOJ give their latest monetary policy statement.

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