New Greek Aid Package in the Works; Swiss GDP disappoints

Positive sentiment supports riskier assets started at the beginning of the Asian session, continuing to weigh on USD across the board with the exception of AUD, CHF and JPY. Canada Rate Decision Exp unchanged at 1.0%

Euro support came largely from news that Germany is willing to drop its push for an early rescheduling of Greek bonds so new aid package could be delivered before Greece runs out of cash in mid July.

CHF is the relative strength loser after Q1 GDP came out at 0.3% which is the worst reading since December 2009. Market expected 0.7%. Yearly growth slowed from 3.0% to 2.4%.

News from the EZ did not provide any element of surprise when German unemployment change for May came out at -8K, worse than expected -30K and unemployment rate that came in line with expectations at 7.0%. EZ CPI y/y in May was slightly lower at 2.7% vs. expected 2.8%. EZ unemployment in April came unchanged and as expected 9.9%

The upcoming session will bring Canadian consumer inflation data from April in form of RMPI (Raw Materials Price Index) released at 8:30 am EDT which is expected to moderate to 3.7% after jumping to 5.7% month earlier. The impact is likely to be limited as CAD traders will be waiting for 9:00 am EDT when BOC announces their decision on the Overnight Rate. BOC is expected to keep rates unchanged at 1%. The overnight rate has been at 1% since September 2010.

Recent US fundamental releases largely weak. Todays releases include Chicago PMI for May released at 9:45 am EDT expected to mark fourth decline in a row, this time to 63.8 from previous 67.6 and May Consumer Confidence, released at 10:00 am EDT expected to improve slightly to 66.3 from last 65.4. Given the improved sentiment, if US data does disappoint, the risk of prolonged USD pulbacks remain considerable.

8 NEW TRADES including YEN CROSSES, US Crude & updated trades on EURUSD, SP500 and FTSE100: Premium Members Direct Access Here: http://www.ashraflaidi.com/products/sub01/access/?a=434