The dollar showed great resilience in trading yesterday, despite setbacks caused by a weak Producer Price Index report and weekly jobless claims data. The strong showing at the 30-year Treasury auction may have highlighted some of the larger flows in the markets, with traders shifting their allocations from Europe to the United States. It can be said that the political developments in Europe since the end of last week are the main reason for this.
If so, it will keep the Euro in focus again the next day. The fallout from the single currency remains one of the most prominent developments in the currency market this week. The EUR/USD pair completely erased its Wednesday gains in yesterday's trading and is now poised for consecutive weekly declines for the first time since March. In addition, the EUR/GBP pair also continues to remain near two-year lows at 0.8420 currently.
Looking at the measure of risks surrounding the euro and regional bonds, 10-year bond yields between Italian bonds and German bonds remain higher this week.
10-year Italian-German bond yield spread (bps)
It doesn't expand too much but it does highlight some concern for European assets at the moment.
Therefore, this will continue to attract the markets' attention before the weekend. Keeping in mind that there is not much on the European trading agenda today.
0645 GMT – France Final CPI numbers for May
0900 GMT – Eurozone trade balance data for April
That's it for the next session. I wish you all the best in the coming days and good luck with your trading! Stay safe out there.