The euro dropped to a three-week low of $1.10610 on Wednesday, affected by the ECB’s bond buying plans. Furthermore, a Greek parliamentary official stated that Greece will not manage to make the 300 million June 5th payment to the IMF without a deal with its creditors to receive more aid. Sterling gained some ground, both against the dollar and the euro on Wednesday after the Bank of England meeting minutes, where all nine members voted in favor of keeping rates at 0.5%. Coming up on Thursday are the Flash Manufacturing PMIs at 07:00 and 07:30 GMT, and the ECB Monetary Policy Meeting Accounts at 11:30 GMT.
The Japanese Nikkei index (Jappn225) closed on Wednesday at 20,310, the highest it has been in the past fifteen years. On the other hand, the Japanese yen hit its lowest point since mid-March against the US dollar, reaching 121.468 JPY. The Chinese data released early on Thursday indicated that more policy support is needed to support the weakening economy. The May Flash HSBC factory PMI contracted for a third month, falling to 49.1 from an estimated 49.4, and output dropped at the quickest rate in more than a year.
The Federal Reserve released its April policy meeting minutes on Wednesday stating that it would be ‘premature’ to increase rates next month despite the general belief for an economic recovery. A number of concerns were raised, such as the falling oil prices that did not encourage consumer spending. Following the Fed minutes, US Treasury yields fell, while the greenback rose and the Dollar Index climbed back to near a two week high.