

EURO under Crossfire
Since mid April, the US Dollar has accelerated up vs most currencies on the back of Central Bank policy divergence and related increasing interest rates differentials vs other majors currencies. That said, over the last few weeks, EURO specific downside pressure is adding more fuel to the EUR/USD sell-off (negative economic surprises index since Q1, Italian political crisis). Given, this cumulation of negative dynamics, is a slight rebound in EUR/USD still possible short term


A Last Growth Rally Into June
The S&P500 seems ready to resume its uptrend and move up into June. It may or may not make new highs, yet should catch up some of its recent underperformance vs other markets, Europe especially. Indeed, following its recent sell-off, EUR/USD may now rebound possibly into early June,. We however do not think EUR/USD will make new highs ...


The Dollar Is Building A Base
EUR/USD and GBP/USD have moved lower over the last 10 days, while the USD is really starting to accelerate vs defensive currencies such as the Swiss Franc and the Yen. We would still expect some quite of retracement down for the Dollar during May. It may be quite weak vs JPY and CHF. On the other hand, EUR and GBP may attempt to retest their highs. As a result, cross rates, EUR/JPY, EUR/CHF, GBP/JPY, GBP/CHF should remain strong, probably into June, Jean-Francois Owczarczak,