U.S. Dollar Strengthens Against Majors

The U.S. dollar gained ground against other major currencies in early Asian deals on Tuesday. 

The greenback hit a 5-day high of 1.2883 against the euro, 4-day highs of 1.5063 against the pound, 0.9686 against the franc and 102.00 against the yen. 

If the greenback rises further, it may find resistance level around 1.27 against the euro, 1.49 against the pound, 0.98 against the franc and 103.00 against the yen.

Australian, NZ Dollars Weaken Against Majors

 The Australian and New Zealand dollars slipped against their major counterparts in the early Asian session on Monday, as traders sold high-yielding assets after better-than-expected U.S. durable goods orders data raised concerns about Federal Reserve winding down its asset purchase program. 

The Commerce Department report said last week that U.S. durable goods orders advanced a better-than-expected 3.3 percent in April after tumbling by a revised 5.9 percent in March. 

The data added to worries as Fed Chairman Ben Bernanke in Congressional testimony last week signaled that upbeat economic data could lead the central bank to taper its asset purchase program in the next few meetings. 

The aussie slipped to a 4-day low of 0.9614 against the greenback, and further downtrend for the aussie-greenback pair from this level will bring it to its weakest level reached on June 2012. 

The aussie may find support around 0.95 level. The pair ended Friday's deals at 0.9642. The aussie declined to 96.95 against the Japanese yen for the first time since April 2. 

This may be compared to last week's close of 97.67. On the downside, the aussie may eye support around 96.00 level. The aussie fell to a 1-1/2-year low of 1.3443 against the euro from Friday's close of 1.3398. 

The next support for the aussie lies around 1.35 level. The NZ dollar slipped to 4-day lows of 0.8064 against the U.S. dollar and 81.32 against the yen, down from last week's closing quote of 0.8085 and 81.90, respectively.

 If the kiwi extends downtrend, it has support around 0.79 against the greenback and 80.00 against the yen. 

The kiwi that ended Friday's deals at 1.5975 against the European currency reached as low as 1.6019. 

The kiwi may break next downside target level around 1.61. The kiwi eased from session's high of 1.1888 against the aussie and is trading at 1.1919. The U.K. and the U.S. markets are closed for national holidays.

U.S. Dollar Up On Speculation Of Fed Ending QE Program

The U.S. dollar advanced against other major currencies in the Asian session on Thursday in response to comments from Federal Reserve Chairman Ben Bernake indicating a withdrawal of asset purchase program earlier than expected.

 In his testimony before the Joint Economic Committee of Congress yesterday, Bernanke downplayed speculation that the central bank is planning to taper its $85 billion monthly bond buying program. 

"A premature tightening of monetary policy could lead interest rates to rise temporarily but would also carry a substantial risk of slowing or ending the economic recovery and causing inflation to fall further," Bernanke told lawmakers. 

However, Bernake told that policy makers are ready to scale back the QE3 program if presented with data showing sustainable improvement in the labor market. 

"The key to this program is the data," Bernanke said. The greenback reached as high as 103.56 against the yen, closer to 4-1/2-year high of 103.73 set on Wednesday.

 The greenback advanced to a 3-day high of 1.2823 against the euro area currency, reversing from yesterday's multi-day low of 1.2997. 

The greenback may find resistance around 1.27 level. The greenback approached 1.5013 against the pound, a level not seen since March 14. On the upside, 1.49 is seen as the next resistance level for the greenback. 

The U.S. currency rose to 0.9817 against the franc, not far from its 9-1/2-month high of 0.9838 hit yesterday. 

Further upside extension of the greenback-franc pair may help it to find resistance around 0.99 area. 

The greenback spiked up to 1.0392 against the loonie for the first time since June 2012. 

If the greenback extends uptrend, its next resistance lies around 1.045 level.

 At Wednesday's close, the pair traded at 1.0367.

 The greenback strengthened to near a 1-year high of 0.9627 against the Australian dollar and an 8-1/2-month high of 0.8025 against the NZ dollar.

 The next resistance level for the greenback lies around 0.94 against the aussie and 0.79 against the kiwi.

 Looking ahead, PMIs from major European economies, second estimate of U.K. first quarter GDP data and Eurozone flash consumer sentiment index for May are scheduled for release in the European session. 

The U.S. weekly jobless claims for the week ended May 18, new home sales for April and house price index for March are due in the New York session.

BoJ Keeps Monetary Easing Plan Unchanged

The Bank of Japan on Wednesday decided to keep its monetary easing program unchanged from that announced in April and said the economy has started to pick up. 

Reaffirming its latest easing measures, the central bank's Policy Board said the bank will conduct money market operations so that the monetary base will increase at an annual pace of about JPY 60-70 trillion. 

The bank will continued to purchase Japanese government bonds so that their amount outstanding will increase at an annual pace of about JPY 50 trillion. 

The average maturity of the bank's JGB purchases will remain at seven years. 

The Policy Board noted that the economy has started to pick up. 

Exports have stopped decreasing with overseas economies heading towards a pick up, the policymakers noted.

Euro Advances Against Majors; Fed Chairman Ben Bernanke's Testimony In Focus

The European currency strengthened against other major currencies in Asian morning deals on Wednesday as investor sentiment improved following comments from Fed officials that eased concerns about the central bank paring back its asset purchase program.

 While speaking at Frankfurt on Tuesday, St. Louis Fed President James Bullard said quantitative easing has been the most reliable tool while interest rates have been near zero and said the Fed should continue with the program.

 Bullard still noted that the rate of purchases should be adjusted appropriately in view of incoming data on both real economic performance and inflation. 

New York Fed President William Dudley delivered a separate speech in New York questioning whether the adjustment to the pace of purchases would be up or down. 

Focus now shift towards Federal Reserve Chairman Ben Bernanke's testimony before the Joint Economic Committee of Congress at 10:00 am ET.

 Bernanke's remarks are closely watched as it will provide further clues about the Fed's plans to slow the pace of its asset purchase program. 

The euro advanced to a weekly high of 1.2938 against the greenback, up from Tuesday's close of 1.2904. If the euro extends gain, it may breach 1.31 level. The euro appreciated to 1.2533 against the franc for the first time since January 18. This may be compared to Tuesday's close of 1.2528.

 On the upside, the euro-franc pair may breach 1.26 level. The single currency spiked up to a 4-week high of 0.8528 against the pound, after having fallen to a 4-day low of 0.8438 on Tuesday.

 Further extension of the euro-pound pair may see it breaking resistance area around 0.86 level.

 The euro area currency climbed to an 8-day high of 132.67 against the yen and further uptrend for the euro-yen pair will help to reach its highest level in more than 3 years. 

The euro may eye next upside target level around 135.00. Japan saw a merchandise trade deficit of 879.936 billion yen in April, the Ministry of Finance said today. 

That missed forecasts for a shortfall of 620.6 billion yen following the downwardly revised deficit of 364.0 billion yen in March.

 The 17-nation currency approached a 5-day high of 1.3211 against the aussie, recovering from yesterday's multi-day low of 1.3104. 

The euro may seek next upside target level around 1.33. The euro that ended Tuesday's deals at 1.3250 against the loonie and 1.5791 against the NZ dollar reached as high as 1.3274 and 1.5850, respectively. 

On the upside, the euro may break 1.335 against the loonie and 1.596 against the kiwi. The Bank of Japan's interest rate decision is due shortly.

 The central bank is forecast to keep interest rates unchanged at 0.10 percent. 

The Bank of England's minutes of May 9 meeting, U.K. retail sales and public sector net borrowing for April are due in the European session. 

Canada retail sales for March and U.S. existing home sales for April will come out in the New York session. 

The Fed will release the minutes of its April 30-May 1 policy meeting at 2:00 pm ET.

OECD Area GDP Expands In Q1

Wall Street ends flat on correction worries

Stocks ended little changed on Monday, with indexes hovering near record levels as concerns about a correction cut earlier gains that had been prompted by news about a flurry of acquisitions. 

The Dow and the S&P 500 briefly hit all-time intraday highs. Early in the session, investors' sentiment was brightened by a slew of deal news, including Yahoo Inc's acquisition of Tumblr. 

Among the day's top gainers were solar companies after shares of JA Solar Holdings Co Ltd soared following an unexpected rise in revenue and a quarterly loss that was far smaller than expected.

 Energy stocks were the day's top gainers in the S&P 500 while consumer staples were the biggest underperformers. The S&P energy sector index rose 1.3 percent.

 Both major indexes are up about 17 percent for the year so far. "Today is definitely a slow period in terms of news or economic data, and there isn't a catalyst to really move higher or lower," said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York.

 "There are people scared by the sharpness and the length of this rally, which is totally understandable. But there are still those who are afraid to not invest and miss the rally.

" The S&P 500 is up nearly 1,000 points from its low in March 2009. And more than 38 percent of the stocks hit a 52-week high within the S&P 500 last week - the highest percentage since at least 1990.

 Shares of JA Solar jumped 70.4 percent to $9.56. It focus on margins over volume paid off as the Chinese solar products maker halved its operating loss in the first quarter by selling more panels in high-margin Japan.

 Freeport-McMoRan Copper & Gold and Plains Exploration & Production said they would pay shareholders more in dividends if they approved Freeport's roughly $6 billion takeover offer for Plains.

 Plains shares leaped 7.4 percent to $48.94, while Freeport's stock gained 0.6 percent to $32.88. Wall Street got more feedback from the Fed on Monday with some comments from Charles Evans, the president of the Federal Reserve Bank of Chicago.

 Evans said the U.S. Federal Reserve could keep up its current level of bond-buying stimulus, but could end it abruptly in the autumn if by then it was sure that the labor market was on a solid footing.

Volume was roughly 6 billion shares on the New York Stock Exchange, the Nasdaq and the NYSE MKT, slightly lower than the year-to-date average daily closing volume of about 6.34 billion. 

Advancers outnumbered decliners on the NYSE by a ratio of 17 to 13. On the Nasdaq, nearly 14 stocks rose for every 11 that fell.