The risk adverse environment continued as the typically hawkish European Central Bank member Axel Weber suggested that stimulus packages would be needed for the rest of  the year.

As a result, the €/US$ got pummeled taking out the week’s low at 1.2725 en route to 1.2688. In addition, both €/CHF (1.3140) and €/£ (0.8183) traded sharply lower as did €/Yen (108.29).

Undoubtedly, the 2010 low at 107.35 in €/Yen will be in focus as we move forward. Meanwhile, US$/Yen remained captive inside a tight 85.20-85.50 range with no key data points for the market to dig into. On the commodity front, AU$/US$ (0.8845)  followed the euro lower and US$/C$ traded through the 1.05 handle behind a slightly weaker than expected Canada consumer price index (0.5 per cent month-on-month, 1.8 per cent year-on-year).
 
With no data due out in the United States, all eyes and ears will be focused on the US stock market. And now with €/Yen threatening  the 105-100 region, market observers will begin to wonder if Bank of Japan action will occur in the euro cross before it dose in US$/Yen. Either way, the large amount of uncertainty engulfing all of the financial markets is likely to persist into summer’s end