Via Bloomberg
USDJPY and USDCHF are both falling as the fallout from the tumbling equities are staring to confirm the feared global slowdown. EURUSD breaking and staying above 1.12 and the descending trendline would signal that the USD is losing some of it's appeal as rate cuts may be ahead for the Fed with Bullard hinting at rate cuts yesterday and a 50% chance of a rate cut seen for July.
China's manufacturing PMI miss last week showed a lower reading than all Bloomberg estimates, see here, and the new export orders were down to a miserable 46.5 vs April's 49.2.
The fact that the EURUSD is off the 1.10 level is impressive given the list of factors weighing on the Euro as rate normalisation is being pushed out further and Italian debt concerns raises it's head again. Gold is holding above 1.3000 adding to weakness for the USD and the slowdown in global growth is expected to impact the Federal Reserve in rate cuts rather than hikes. The RBA has cut rates as expected and, as Justin points out, it is hard to see how they can avoid further rate cuts down the line.
