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In March, I wondered aloud about whether the New Zealand Dollar might be the most overvalued currency in the world. Since then, it has continued its unlikely ascent, rising 10% on a correlation-weighted basis and 3% against the US Dollar, hitting a 26-year high in the process. While there are signs that the New Zealand economy might be able to withstand an expensive currency, at some point, the chickens must come back to roost.

Surely the expensive kiwi must be wreaking havoc on the New Zealand dollar? “How is New Zealand supposed to rebalance its economy away from consumption, importing, borrowing and asset selling towards investment, production, exporting and asset buying when our currency is headed for record highs?” Wonders one commentator. In fact, exporters are coping just fine, and New Zealand just recorded its highest quarterly trade surplus on record. Never mind that this is due almost entirely to soaring prices for commodities and unflagging demand.

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U.S. stocks will open higher Tuesday as stocks across the board are enjoying some relief following speculation that Greece will get additional financing from other European countries after all.

S&P 500 Index futures are currently up 1.0 percent ahead of the open. Today’s key event is U.S. consumer confidence figures in May (14:00 GMT) expected to come out at 66.5 compared to 65.4 in the prior reading. The figures are important as the latest U.S. figures have disappointed somewhat signalling that the economy is slowing down. However, it is our belief that the current slowdown is transitory and the second half will see a pickup in economic growth.

In Europe, the Euro STOXX 50 Index futures are currently up 2.0 percent driven by gains in Siemens (+3.3%), BASF (+3.9%) and Banco Santander (+2.8%). German retail sales in April came in better than expected year-over-year adding to the positive sentiment.

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It starts with the lack of acceleration through the “00″. Breaks through major psychological level – of which the “00″ is the most significant – can often lead to momentum as prices find footing at the “00″. When this doesn’t happen, I have to stop and wonder why…

The dollar’s bounce was on par with the pullback in the Dow Jones, an inverse correlation I watch closely.

Chart courtesy of eSignal with my GRaB and 34EMA Wave plug-in.

The U.S. Dollar Index overlaid with the Dow Jones (e-mini). This chart is often an excellent visual representation of the push-pull relationship of these two contracts which can often shed light on risk appetite and risk aversion.

It’s logical then that if the Dow Jones has completed it’s correction lower, then the U.S. Dollar Index has also reached resistance. Again, it’s back to that lack of acceleration to the upside of the dollar after breaking 76.00.

Here’s another view of why the dollar may be struggling to reach for higher highs and attract more bullish momentum.

Chart courtesy of eSignal with my GRaB and 34EMA Wave plug-in.

The weekly U.S.

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The second reading of US Q1 GDP was somewhat disappointing; consensus estimates were looking for upward revisions to 2.2% QoQ annualized, but instead the figure remained at the originally reported level of 1.8%. Softer growth in real consumption appears to have been the main reason this reading fell short of expectations, but overall the results confirmed a soft start to 2011 growth which predictably led to a rally in US fixed income and widespread USD weakness. In turn we have seen USDCHF collapse to new all time lows of 0.8533 and EURCHF hit a record low of 1.2166. This latest move will only compound problems for the SNB, who have already been vocal in their disapproval at prevailing CHF strength. Currency appreciation acts as a form of monetary tightening, and with CPI in Switzerland falling precipitously close to deflationary levels, more monetary tightening is really not what policy makers need. At the last reading Swiss CPI dropped to 0.3% MoM in April, toying alarmingly close levels at which the SNB may feel compelled to act – but how they will act or whether any potential action will succeed is altogether more uncertain. Full article…

Jean-Claude Juncker, Eurogroup leader, said earlier that the IMF may not send its portion of bailout funds to Greece next month, as agreed. Concerns about the growing difficulties in Greece, and concerns about what could next, sent the euro lower in forex trading.

However, the euro is gaining ground again against the U.S. dollar, thanks to some disappointing data. Initial unemployment claims rose in the U.S. last week, and GDP data for the first quarter wasn’t revised upward as expected. The news was disappointing, and that is causing some dollar weakness.

As a result, the euro is gaining in forex trading as focus shifts to the problems in the U.S. It will be interesting to see what happens next. EUR/USD has been quite volatile in currency trading lately as forex traders change focus, trying to decide which economic situation is worse. 

You shouldn’t desperate when you meet the debt problems. There are some steps that you take on the road to credit card debt relief. If you are determined to remove your credit card debts, the best thing to do is list all your debts. Once you determine the total amount of debt, you need to decide how much you can afford to pay your card debts each month. The next step is the addition of all minimum monthly payments of debt for all your credit cards.

Calculate your total minimum monthly salary and subtract what you have allocated to debt elimination credit card. Repay the credit card with the highest interest rates. Once you’re done with it pick for the card which is now the highest interest rates. This process must be repeated until you get the complete elimination of credit card debt.

With all your debts paid, keep some of what you paid for the debts of credit card and register an account. The other half can be used for your day other expenses you normally have to bear, perhaps also a pleasure for yourself! Full article…