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The dollar and yen rose while stocks fell on Friday. Goldman Sachs Group Inc. was sued by SEC for fraud tied to packaging and selling collateralized debt obligations. President Hu Jintao reiterated that China is moving forward with a gradual “managed” floating exchange-rate plan. US economic data were mixed; March housing starts and building permits were better than anticipated while April consumer sentiment was weaker than expected. The S&P 500 index fell 19.54 to 1,192.13. The euro was pressured by ongoing worries about debt-laden Greece. Sterling depreciated on increased risk of a hung parliament after UK's third party, the Liberal Democrats, gained in opinion polls making it less likely that any party could win a majority. The Australian and Canadian dollars fell as commodity prices dropped and risk aversion rose.

The USD/JPY fell as investors sold risky assets. Japan's ruling party said monetary easing and currency invention are needed to combat deflation. However, the comment did not seem to affect the pair. Since failing to break the 94-area resistance, the USD/JPY has been consolidating gains. Still, the long-term technical outlook is bullish. The long-term downtrend was broken and the pair will likely resume its rally. Resistances are in the 94.50 and 96.50 areas and supports in the 91.50 and 90.00 areas


Hans Nilsson
Capital Market Services, L.L.C.
www.cmsfx.com