EUR/USD

The euro traded solidly higher against the U.S. dollar Monday, buoyed on speculation that European leaders will act to manage the debt crisis in the region, but global growth fears and Spanish economic worries continue to weigh on the single currency The single currency hit a session high against the greenback when European Central Bank Governing Council member Ewald Newton stated he supported the idea of a European banking union. Earlier Monday, sentiment on the euro started to improve after Portugal’s Finance Minister Vitor Gaspar announced that the country's EUR78 billion bailout program was on track. Gaspar also reported that Lisbon is planning a EUR6.65 billion liquidity injection to shore up the country’s fragile banking system. In addition, official data released earlier showed that producer price inflation in the euro zone was flat in April, which could give the ECB leeway to cut rates ahead of its policy meeting this week However, investors remained wary of pushing the single currency too high amid concerns over the outlook for global growth in the wake of Friday’s dismal U.S. employment data, while worries that Spain’s high borrowing costs could force Madrid to seek a bailout also weighed.

GBP/USD

The pound pushed higher against the U.S. dollar on Monday, amid new hopes of progress in tackling the debt crisis in the euro zone, but gains were capped by sustained global growth concerns. Market sentiment slightly improved after European Central Bank Governing Council member Ewald Newton said he supported the idea of a European banking union. The pound found support earlier; after Portugal’s Finance Minister Vitor Gaspar announced that the country's EUR78 billion bailout program was on track. Gaspar also said Lisbon is planning a EUR6.65 billion liquidity injection to shore up the country’s fragile banking system. But investors remained cautious as concerns over the outlook for global growth persisted following Friday’s disappointing U.S. employment data, while worries that Spain’s high borrowing costs could force Madrid to seek a bailout also weighed. In the U.S., official data showed that factory orders unexpectedly fell 0.6% in April, declining for the second consecutive month and defying expectations for a 0.2% gain.

USD/JPY

The U.S. dollar was higher against the yen on Monday, amid concerns over the possibility of a fresh intervention by Japan and after the Bank of Japan indicated that no stimulus measures will be implemented in the near future. Investors remained wary of a yen weakening intervention Japan’s Finance Minister said Friday that the strength of the yen did not reflect economic fundamentals and warned that if “excessive” and “one-sided” moves continued, he would “respond decisively". Meanwhile, in a speech earlier, BoJ Governor Shirakawa reiterated his upbeat view on the economy and warned against central bank buying of government bonds too aggressively, a sign the BoJ was not inclined to offer fresh stimulus measures any time soon. Investor confidence remained vulnerable after the U.S. Department of Labor said on Friday that the economy added just 69,000 jobs in May, far below expectations for a gain of 150,000, while the unemployment rate ticked up to 8.2% from 8.1%. The weak data added to concerns that the economic recovery in the U.S. is losing momentum and fuelled speculation over the possibility of a third round of quantitative easing from the Federal Reserve.

USD/CAD

The U.S. dollar erased gains against its Canadian counterpart in muted trade on Monday, after Friday’s surprisingly weak U.S. nonfarm payrolls report raised the prospect of more monetary easing from the Federal Reserve. Official data on Friday showed that the U.S. economy added just 69,000 jobs in May, far below expectations for a gain of 150,000, while the unemployment rate ticked up to 8.2% from 8.1%. The disappointing data fuelled speculation over the prospect for a third round of quantitative easing from the U.S. central bank. Investor sentiment was also buoyed after Portugal’s finance minister said earlier that the country's EUR78 billion bailout program was on track, but investors remained cautious amid fears that Spain’s high borrowing costs will force Madrid to seek a bailout. Trade volumes remained thin on Monday, as markets in the U.K. were closed for the Queen’s jubilee. Meanwhile, investors were looking ahead to the Bank of Canada’s policy meeting on Tuesday, amid speculation that the central bank may indicate that it is considering a rate hike in the coming months. 

CL2N

Crude oil futures slipped lower Monday, striking an eight-month low despite the U.S. dollar moving lower against its major counterparts, as ongoing concerns over weakening global growth prospects continued to pressure oil lower   Oil futures found support as the dollar index gave up early gains and entered negative territory, as concerns over the situation in the euro zone eased slightly and amid growing hopes for policy action from global central banks. Traders are closely watching several monetary policy meetings due this week, including the European Central Bank on Wednesday and Bank of England on Thursday, for clues on their responses to weakening global growth. Federal Reserve Chairman Ben Bernanke on Thursday will testify before a congressional committee about the state of the U.S. economy. Energy prices came under heavy selling pressure during the Asian trading session, as markets were spooked after the Department of Labor said Friday that the U.S. economy added just 69,000 jobs in May, the smallest increase in a year and far below expectations for a gain of 150,000. Meanwhile, downbeat manufacturing data from China and Europe hurt prospects for global oil demand, further weighing on prices. A deeper slowdown in China, the world’s second biggest economy, would impair a global expansion that is already faltering because of the implementation of harsh austerity measures in Europe.

GOLD

Gold futures held steady during U.S. morning hours on Monday, consolidating strong gains from the previous session as markets looked forward to several monetary policy meetings later this week before pushing prices higher. The weak data added to concerns that the economic recovery in the U.S. is losing momentum, which could lead to a third round of quantitative easing from the U.S. central bank. Gold investors will be closely watching U.S. data in the second quarter for clues as to the likelihood of a fresh round of monetary easing, which could potentially hurt the dollar and support gold. Vincent Reinhart, Morgan Stanley's chief U.S. economist and a former Federal Reserve official, said Friday that there is an 80% chance that a new quantitative easing program is announced at the June 19-20 Fed meeting.