Fundamental analysis.
On May, 4rd EURUSD holds steady near the previous levels. The European Central Bank, the Bank of England and the Bank of Canada left key rates at the same level. The European Central Bank, which sets interest rates for the 16-nation euro zone, held its key rate at 1% and said it will launch a €60 billion program to buy low-risk bonds in July. Canada's central bank, meanwhile, left its key rate on hold at a record low of 0.25%. The Bank of England also kept its key rate on hold at 0.5%.
ECB President Jean-Claude Trichet, speaking at a news conference following the central bank's decision, forecast the pace of the bloc's sharp slowdown will ease this year. Mr. Trichet called the current 1% policy-rate level "appropriate."
Today the following block of macroeconomic statistics is expected:
1/ Britain Producer Output Price Index for May
2/ Britain Producer Input Price Index for May
3/ Employment index in Canada for May
4/ Unemployment index in Canada for May (previous level – 8,0%, forecast – 8,2%).
5/ Employment Situation in the USA for May. Nonfarm payroll employment fell a very steep 539,000 in April, following a 699,000 plunge in March. The good news was the contraction in jobs eased somewhat. The big question for the May employment report is whether the shrinkage in losses will continue. A second slowing in a row in payroll layoffs will be a boost to equities. On the wage front, average hourly earnings were very weak in April, rising only 0.1 percent and May's number likely will be sluggish, too. Turning to the household survey, the unemployment rate jumped 4 tenths to 8.9 percent in April. If this rate doesn't ratchet upward again in May, it will be a big surprise as it is hard to find an economist not calling for further increases in the unemployment rate for some time.
6/ US Consumer Credit index for April (previous level – $-11.1 B, forecast – $-7.0 B)
FBS analysts predict that the euro will continue to become stronger relatively to dollar. It is connected, first of all, with possible acceleration of inflation rates. State budget huge deficiency is threat of US financial stability.