Monthly Archives: May 2009

The US dollar is recouping some of its recent losses, as momentum traders cut back on their positions due to this week’s major events. Rumors about the impending stress test results indicate that Bank of America will be required to raise $34 billion in capital. They also say that Bank of America may raise the $34 billion in capital by selling its stake in China Construction Bank, as early as Thursday. This is probably another reason why momentum traders have cut back their positions. The Pound and the Aussie got enough of a boost to jump off their lows, but not enough to retest their high’s from yesterday. The boost came after reports of bettern than expected UK PMI services data and Australian retail sales and trade data.

World equity markets are mixed. In Asia, financials pushed the Hang Seng up 2.53%. The CSI 300 rose 1.42%. Japan is still closed for Golden Week.

The US Dollar is giving up some ground against the British Pound today. Some reports from stress test data indicate that as many as 14 banks may need to raise additional capital. However, there was not as significant reaction to the news. The Pound is trading higher today, due to some favorable PMI construction data, allowing momentum traders to keep it moving on the buy-side. The Aussie is at a new 7 month high, boosted by the RBA leaving rates unchanged at 3%. The big events of the week are still the ECB and Bank of England meetings, along with the US jobs data and stress test results.