All three have obscured the better than expected GDP and the still large interest rate differentials favoring the euro.
The US data continues to surprise to the downside and the Japanese data are pointing to a recession.
The Bank of Japan meets on May 20th and the Japanese government is asking for QE-like help.
The risk is for action by the Bank of Japan to ease credit further and for the ECB to remain vigilant by indicating a rate hike for July 7th.
Investors want to buy below current price to take advantage of any additional bad news on Greece, Portugal or Ireland.
Today, Japan announced their GDP was worse than expected at -0.9% vs -0.5% or -3.7% vs -1.9%. Coupled with the negative Q4 GDP, Japan is officially in a recession and is likely to be there until after the summer. Unfortunately for this trade, the DSK situation has calmed down as has the Greek default talk. This means we likely missed the opportunity.
However, I do believe we’ll trade in ranges until after Memorial Day and may get a shot at it later.
For today, take a look at the New Zealand dollar as New Zealand had better than expected budget news, currency rallied and put in new daily high, but is now back to yesterday’s close. Higher high, with lower close is a typical sign of short term weakness. There’s a nice down trend channel starting to form.
Andrew B. BuschDirector, Global Currency and Public Policy Strategist at BMO Capital Markets, a recognized expert on the world financial markets and how these markets are impacted by political events, and a contributor to CNBC's Money in Motion Currency Trading.You can comment on his piece and reach him hereand you can follow him on Twitter at http://twitter.com/abusch .
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