Euro Deepens Losses After IMF Head's Assault Charges
The euro opened the week lower as sexual assault charges against IMF managing director Dominique Strauss-Kahn threatened to interrupt bailout talks aimed at stemming Greeces debt crisis. The upcoming Asia-Pacific session features data on Japanese corporate goods prices and Australian home loans.
Police officers in New York arrested the Strauss-Kahn leader after he boarded a plane destined for France. Strauss-Kahns lawyer said denied the charges and he will plead not guilty. Strauss-Kahn was widely expected to head the French Socialist Party and become a leading candidate in next year's presidential elections.
On Sunday, Strauss-Kahn was due to meet with German Chancellor Merkel about Greece and attend meetings in Brussels. IMF first deputy director John Lipsky will act as interim leader and European leaders said talks about Greece and other troubled nations will not be affected.
EUR/USD opened 30 pips lower at 1.4075 and the euro posted similar declines against other currencies. The scale of the declines suggests it could simply be a continuation of last weeks selloff but any fresh uncertainty about Greece is also a factor. Other market moves so far have been minimal with CAD as a minor outperformer.
The upcoming session features data on Japans corporate goods price index and core machinery orders at 2350 GMT. These are both second-tier reports. The CGPI is expected at +2.1% after a 2.0% reading in March. The data will offer some evidence about how commodity price increases are affecting business. Core machinery orders, which exclude orders for ships and from electric power firms, are expected down 9.7% in March due to the earthquake and disaster. In February, prior to the quake, orders fell 2.3%. The Cabinet Office will also release annual benchmark revisions and forecasts for April-June orders. These forecasts should shed some light on the effects of the disaster.
At 0130 GMT Australia will release data on home loans, with the media forecast calling for a 2.0% increase. The Australian dollar is vulnerable to soft housing figures because the sector is seen as overvalued.
By AB - Ashraf Laidi.com Staff
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