FX Daily Review

May 1^st, 2009

Yesterday the markets opening sentiment was a continuation of the optimistic buyout a day before. The Fed assessments which outlined the deterioration is slowing had satisfied investors and spurred some more optimism for the already intoxicated markets. The positive momentum drove the Greenback once again to weekly lows against the European majors as risk was put aside once again. The pound gained strongly and consolidated with 1.49, the Euro moved higher and traded above the 1.33 area. In Asia-pacific the Australian Dollar and the New Zealand Dollar gained bullish momentum as the high-yielding currencies continued to perform well. The Aussie dollar traded close to its monthly peaks against the Dollar and the Yen with above the 0.73 versus the dollar and 72.5 against the Japanese Yen. Equities continued to gain while the BOJ had slashed its forecasts for the Japanese economy and the EU unemployment figure still expanding. Evidently the notion among investors was as if none of the factors was able to set the positive sentiment off its course. However as the trading session in equities was advancing towards its close the news on the Chrysler bankruptcy was published ,investors were reminded once again the crisis and the economic sickness it brings with it, are still here. The bullish momentum which had driven the market most of the day had puffed away.

The Day ahead- The Markets will try and regain the positive sentiment which faded yesterday.The effect of a negative Japanese CPI and unemployment readings expected to be published at the opening of the Tokyo session alongside the BOJ remarks a day before could depress some of investors’ appetite for risk and restrain bullish pressure on the high yielding currencies.

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