Currencies rangebound

The US Dollar continued to remain rangebound against the major currencies as players look forward to today's US April non-farm payrolls data.
Weekly jobless claims in the US rose by 11,000 to 333,000 in the week ending April 30 but market ignored the data and concentrated more on today's employment data release. US non-farm productivity rose by 2.6% on the year in Q1 against a 2.1% rise in Q4.
Meanwhile, Sterling slipped off its highs near 1.9100 after exit polls showed a narrow victory for Britain's ruling Labour Party headed by Tony Bliar. On the data front too, UK Services PMI fell to 56.5 in April against 57.0 in the previous month as per expectations.
In other news, the bond ratings of top US auto-makers, General Motors and Ford Motors, were downgraded to 'junk' status by Standard and Poor.

Outlook for the day
EUR/USD - Euro is expected to trade flat in a technical 1.29-1.30 range (before non-farm payroll data). We recommend exporters to take partial cover near 1.3000.
GBP/USD - GBP too is expected to trade in 1.8975-1.9075 range before the US employment data.
USD/JPY - USD/Yen is expected to trade in 104.25-105.25 range. Exporters are advised to take partial cover near 104.25.

US Dollar hits lows

The US Dollar remained rangebound against crosses in the overseas market ahead of important US non-farm payroll data on Friday. Economists expect an addition of about 130,000 jobs in April.
Meanwhile, US Services PMI moved to 61.7 in April, higher than the forecast of 61.3 but lower than previous month's index of 63.1.
In other news, the European Central Bank kept interest rates unchanged at 2% in line with market expectations. In a press conference, the ECB chief offered a grim short-term economic outlook for the Euro region, however he denied any possibility of a rate cut.

Outlook for the day

EUR/USD - Euro is expected to trade in a 1.2900-1.3000 range with a slightly stronger bias ahead of non-farm payroll data.
GBP/USD - With support seen near 1.8975, GBP is expected to trade in 1.8975-1.9075 range.
USD/JPY - USD/Yen is expected to trade in 104.25-105.25 range.

US interest rates rise 0.25% to 3%

The US Dollar slipped against most major currencies after the FED announced an increase in the interest rates by 25 basis points to 3%.
The US currency took the beating on the Fed's clarification that long-term inflation is well contained. Traders who had been expecting more hawkish comments- quickly reversed their positions resulting in a broad Dollar decline.
However, positive US factory orders data was largely ignored by the markets. The US Factory orders rose by 0.1% in March against a decline of 0.5% in February.

Outlook for the day

EUR/USD - Euro rebounded smartly and broke 1.2900. It is now expected to further move up and test the resistance at 1.3000. Expected range today is 1.2900-1.3025.
GBP/USD - GBP too is expected to move higher in 1.8980-1.9100 range.
USD/JPY - USD/Yen again pierced its way below 105.00. The pair is expected to trade in 104.00-105.50 range.

Awaiting the FED's interest rate move

The US Dollar recovered against most of its European counterparts in the US trade yesterday.
The most significant movement was seen in GBP as Cable broke the key psychological level of 1.9000 and shed about 150 points.
However, US April ISM manufacturing data fell to 53.3 against the expectation of 55. The Employment Index too declined to 52.3 from 53.3 in the previous month.
Players would now keenly watch the FOMC meet outcome and the accompanying comments on the US economy for fresh clues.

Outlook for the day

EUR/USD - EUR/USD Euro is testing the support at 1.2800 and expected to trade in a thin range as players would prefer the sidelines ahead of FOMC meet and comments today.
GBP/USD - After breaching 1.9000 levels, GBP is expected to test the supports in 1.8850-1.8875 region. Expected range 1.8875-1.8975 with weaker bias.
USD/JPY - USD/Yen is expected to trade in 105-106 range. Correction in Yen rally to 106.50 levels is not ruled out.