US dollar strengthened moderately against Euro and Sterling after the payrolls report, however the ascent was more acute against the Yen. Yen faltered after Bank of Japan reported that it would purchase more bonds in order to keep short-term interest rates low, especially when rising yields in Europe and US are starting to impact Japanese bond markets. In this respect, German ten year sovereign bond yields is hovering around 18 month high of 0.57%, helped by stronger Euro zone macro readings. German industrial production in May expanded by 1.2% on mom basis, while French and Spanish industrial production jumped by 1.9% and 3% respectively. Yuan continues to trade on a firm note, helped by Moderation in the foreign capital outflows. Meanwhile, Chinese President stated that the economy should improve in the second half of this year, a divergent view when compared with the market consensus. A Reuter’s survey in June projects that yuan will weaken to 7.05 over the next 12 months.
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