Dollar weakens on profit-taking

•     Dollar weakens on profit-taking

–    Falls vs most G10 currencies despite higher Fed funds rate expectations, increasing tensions over Greece & Ukraine

–    EUR/USD remains in tight range despite chaos in Greek assets; FX market may be discounting a successful conclusion to the difficult talks

•     French election shows why the EU has to solve Greek problem

–    Hollande’s Socialists win, but far-right National Front wins nearly 49% of the vote

–    Revolt of the voters on the left (SYRIZA) and the right (NF) will force incumbent politicians to reach a successful conclusion lest they be voted out of office

•     China’s disinflation deepens

–    CPI eases to 0.8% yoy, PPI -4.3% yoy

–    Stocks rise though on assumption of further PBOC easing

•     Today:

–    G10:  Meeting will validate current monetary policies, leaving the way open for the “indirect currency wars” to continue

–    Eurozone: French industrial production

–    UK:  Industrial production expected to fall mom; could be GBP-negative

US: NFIB small business optimism expected higher, JOLTS job openings to rise = USD-positive