Rising risk appetite this past forex trading week undercut the safe-haven currencies, while lowering confidence indices and milder inflation figures did the same for the Euro and easing of commodities prices weakened the currencies of export nations—leaving the U.S. dollar and the pound sterling as the last major currencies standing.

Australian inflation printed at 4.2% in March and retail sales continued higher, although mainly due to rising food and petrol prices; however, with dwelling approvals down 5.7% in March and commodities including gold returning to lower levels, the RBA is widely expected to leave interest rates on hold at the Tuesday 6 May meeting. AUD/USD is forming a descending (bearish) consolidation triangle off Wednesday 23 April’s high at 0.9539 with the base around the 0.9290 level.

The Fed’s 25bps interest rate cut, the delivery of their expected statement regarding shifting into neutral bias, and a rather better-than-expected U.S. employment report, all contributed to lifting the confidence of investors and continuing the mild USD rally begun the previous week. Real 1Q2008 GDP growth measured in at 0.6% annually, bolstered by healthy exports and lean business inventories, and the April unemployment rate returned to 5% after rising to 5.1% in March, also encouraging traders to buy USD in the belief the majority of monetary policy easing is now behind the U.S., at least.

April Eurozone inflation lowered to 3.3% y/y as compared with 3.6% y/y in March, while the German Ifo business survey slid in all categories. Neither of these reports will induce the ECB to contemplate lowering interest rates from the current 4% at their meeting on Thursday 8 May. EUR/USD fell 1.3% during the forex trading week, making for a 3.7% cumulative loss since setting the current record of 1.6019 on 22 April, and pressure continues to build to the downside.

The slowdown in the U.K. is even sharper although not cataclysmic, with fading employment growth and declining house prices lowering consumer confidence although not yet consumer spending. However, the BoE cut rates in April and are not likely to repeat the maneuver so soon without stronger inducement. EUR/GBP continued sliding for the third consecutive week and is down 3.5% from the record of 0.8097 set 16 April.

GBP/USD continues range-trading between 2.0000 and 1.9600 with spikes through both levels; however, on H4 charts, a series of progressively lower highs can be seen, signalling some downward pressure.

The downturn in the New Zealand economy intensified, with dwelling approvals falling more than 30% annually and the trade balance for March coming in as a small deficit rather than the expected large surplus from dairy foods, oil, and lumber. NZD/USD consolidated through the forex trading week, also with a series of lower significant highs showing further falling to be possible.

The Japanese yen and Swiss franc, the major safe-haven currencies, lost some of their appeal this forex trading week as investors regained some risk appetite and resumed carry trades. AUD/JPY has trended consistently higher since bottoming out on 20 March at 88.14, closing the week at 98.60, an almost 12% gain, and both USD and EUR gained against CHF since the bleak days of mid-March, USD by 8.8%, EUR by 5.8%.