Euro Hit by Ireland's Rejection of the Lisbon Treaty (page 2 of 2)

Therefore the impact of the Irish vote on the Lisbon Treaty should be limited.

In the week ahead, we look forward to Eurozone consumer prices, the German ZEW survey and producer prices. Switzerland also has an interest rate decision and a small minority expects interest rates to be increased to 3.00%.

Pound Sterling held back by the Dollar

The British pound has strengthened against all of the major currencies except for the US dollar which indicates that the strength of the greenback is the primary reason for the GBP/USD's drop towards three month lows.

With only secondary releases due from the US next week, UK economic data should return to the forefront and drive the fluctuations in the pound.

Consumer prices and retail sales are expected along with the minutes from the most recent monetary policy meeting. We believe most of these reports will be pound bullish as inflationary pressures in the UK continue to grow.

Canada is in the limelight next week, New Zealand retail sales beat expectations

Despite stronger economic data, the Canadian and New Zealand dollars weakened while the Australian dollar strengthened.

In Canada, manufacturing shipments increased a whopping 2% in April, compared to the market's call for a 0.4% drop.

New Zealand retail sales also rose for the first time in three months by 1% thanks to higher spending on cars and tires.

Australia on the other hand had no economic data but RBA Governor Stevens did warn that the current level of interest rates, which is at a 12 year high, is essential to restrain inflation.

In the week ahead, the Canadian dollar is one of the main focuses of the currency market as consumer prices, leading indicators and retail sales are due for release.

New Zealand only has service sector PMI while Australia has the minutes from this month's RBA meeting and leading indicators due for release.

Japanese Yen closing in on four month low

The Japanese Yen is closing in on its four month low against the greenback. The Bank of Japan left interest rates unchanged at 0.50% last night, which was right in line with the market's expectations.

Economic data was mixed, with the stronger industrial production report offset by another decline in consumer confidence.

Sentiment in Japan has fallen to a six-year low as consumers face rising prices and a softening labour market. Therefore heed BoJ Governor Shirakawa's warning that there is a higher risk that growth will continue to slow.