Daily Report: Dollar Broadly Lower, Swiss Makes Record Highs

The economic data triggered selloff in dollar extends further today, sending the greenback broadly lower. Overnight comments from EU Juncker triggered brief pull back in EUR/USD but that was quickly overshadowed by weakness in the greenback. Drop in treasury yield is also seen as another factor weighing on the dollar as 10 year yield drops to a six-month low over night. Swiss franc jumped to new record high against dollar and euro as IMF urged SNB to raise rates. Meanwhile, Kiwi extends recent rally to a three year high, taking the Aussie higher too.

The rally is Swiss franc is particularly impressive. Safe haven flow from Euro is once factor which IMF's comments added more fuel. The IMF noted that Switzerland's exception fiscal position of nearly balanced budget and said "with the output gap closing and a below neutral policy interest rate, monetary accommodation should be withdrawn in the near-term under the baseline scenario."

There was temporary setback in EUR/USD's rebound over night after President of Eurogroup of finance ministers Juncker said Greece won't reach its 2011 budget deficit goal, and that the IMF may withhold the next tranche of Greece's bailout funds. Also, former ECB economist Issing accused that Greece "cheated" to get in Eurozone. The comments kept Euro under pressure in crosses.

On the data front, Japan core CPI rose 0.6% yoy in April, first rise in two years on a spike in energy and tobacco prices, retail sales dropped -4.8% yoy in April. UK Gfk consumer sentiment improved to -21 in May. Eurozone M3 and confidence indicators will be released. Swiss KOF leading indicator will be a focus as Swiss bulls would draw every excuse to send the currency higher. From US, personal income and spending will be released and dollar selloff might extend further in case of data disappointment.

New Zealand dollar has been exceptionally strong this week. NZD/USD's break of 0.8118 resistance yesterday confirms up trend resumption. And that's supported by rising upside momentum too. 0.8213 record high set in 2008 should be taken out in near term with ease and we're expecting the uptrend to extend further to 100% projection of 0.6559 to 0.7973 from 0.7115 at 0.8529 in medium term. 

Meanwhile Swiss Franc also rose to new record high against sterling overnight. GBP/CHF dropped to as low as 1.4028 so far. Current down trend should now extend through 1.4 psychological level to 100% projection of 1.5689 to 1.4295 from 1.5169 at 1.3775 next.