The US Dollar has continued to exhibit weakness and has lost some more ground in the last few weeks with the DXY Dollar index, (an index that measures the dollars strength compared to a basket of other currencies), moving from 98 to a low of 96.5 before recovering to 97.2. This has occurred after a break below the key 100 level in the previous month. Against the Thai baht, the US Dollar also weakened from the 34.36 to 34.66 range to move to 33.92. The rise in US interest rates did little to deter sellers. With further rate rises expected in the U.S., it could be that the outlook is for a steadier USD, however a trend may be set in place already for further weakening.
The British pound rose as high as 1.3050 to the USD but took a dive to 1.2640 after the results of the UK general election that left the Conservatives with a minority. However this was quite a small drop considering the magnitude of the news and with some other economic data coming to the fore such as higher than expected inflation numbers, the British pound has clawed back some of the losses to settle in the range of 1.2750 to 1.2820. Against the Thai Baht, the drop was mirrored and the British unit now fetches a just 43.34 compared to 44.6 before the election. Expect the spread at currency exchange booths to be high due to continued volatility.
The USD/JPY cross topped out at 114.38 to the U.S. Dollar and dropped quite quickly back to 109.50 where it found support and rallied once more towards 111.45 before dropping back to 110.89. It is now caught between two opposite trends and so may be in for a period of consolidation. For those expecting a drop back to 108 and below then the current level looks enticing as a top. Yet there are plenty of market participants expecting a return to 114 and above. Much may depend on the U.S. Dollar and also domestic economic events in Japan. As for a safe haven currency this still remains in place and it may be that any equity selloff will see a flight to the Yen. Against the Thai baht the yen remains in a tight range between 0.313 and 0.3055.
The Russian ruble strengthened against the US Dollar from 58 to 56.4 only to reverse all the gains and trade back at 57.74. Against the Thai Baht it has dropped from 0.605 to 0.5775. Volatility has increased but the range has kept mainly steady, simply the boundaries have expanded on both ends. World events have had little impact on the Ruble, yet it would be worth watching the oil price as this may have an effect on the currency in the near term.
The Euro has managed to keep its gains after rising quite sharply after the French elections. The 1.10 area remained as good support with the Euro taking out 1.12. The gains look set to continue based on the current trend, however they may become more muted with less news in the fray. Against the Thai baht the Euro remained in a tight range from 38.0 to 38.4, upslightly from 37.85 previously.
