| 5/27/2008
2:30 pm: EUR/$..1.5712 $/JPY..104.12 GBP/$..1.9756
$/CHF..1.0304 AUD/$..0.9589 $/CAD..0.9931
Greenback Recovers
The greenback kicked off the holiday-shortened
week higher against the majors, edging up to 104.32
versus the yen and 1.5703 against the euro on
the heels of mixed US economic reports earlier
in the session. New home sales in April reversed
an 8.5% decline in March, improving by 3.3% to
526k units. However, the Case Shiller home price
index in March posted its steepest decline on
record, down by 14.4% versus a 12.7% drop in February.
Meanwhile, in another sign of the struggling US
economy ¨C the Conference Board¡¯s
May Consumer Confidence survey dropped to a two-year
low and worst than expectations to 57.2 versus
April at 62.3.
Economic reports slated for release on Wednesday
will see April durable goods orders. Also due
out this week will be Q1 core PCE, GDP, weekly
jobless claims, April personal income, consumption
and the May University of Michigan sentiment survey.
Yellen Expresses Neutral Stance
San Francisco Fed President Janet Yellen said
that monetary policy was reasonably positioned
now, saying the Fed will have to be attentive
to reversing the rate cuts. Yellen discounted
further incoming weak economic data suggesting
it would not automatically signal additional rate
cuts. She expects the housing market to bottom
some time in 2009 and sees consumer spending holding
up better than feared. Yellen also suggested the
Fed will likely remain unchanged for some time,
saying the Fed will eventually need to raise rates
at some point, which is still down the road.
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