Forex News Review- Euro eases off six-week highs; NZ dollar dips after inflation data

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EURUSD eased off its six-week high that was reached in the US session when euro gained across the board on a rise in risk appetite as investors grew confident European leaders will come up with a broad agreement to deal with the euro zone’s debt crisis at a second EU summit on Wednesday. Hitting strong resistance levels, the pair dipped to lows of 1.3890 on profit-taking and Asian stock markets declined. Later today, French and German consumer confidence data will be released, with expectations for a drop, which could affect the euro. The main focus however will be on tomorrow’s EU Summit.

 

GBPUSD opened in Asia at 1.5999 and remained close to the 1.6006 six-week high reached yesterday. The pair traded in a 1.5977-1.6005 range with interest on the low side. UK current account data are due later today and Bank of England governor King will be speaking.

 

USDCHF traded sideways in a tight 0.8789-0.8817 range not much changed despite a stronger US dollar elsewhere. EURCHF opened Asia at 1.2266 and dipped sharply early in the session to 1.2230.

 

USDJPY opened in Asia at 76.10 and hovered near a record low hit last Friday but remained above the physiological key support level of 76.00, after Bank of Japan governor Azumi repeated his warning that he is watching markets closely as there have been speculative moves, so investors fear another intervention if yen got too strong.

 

AUDUSD was flat in early Asian trading after trading to a six-week high of 1.0499 in the US session on surging commodities. The pair eased to 1.0448 on profit-taking after hitting key resistance levels.

 

NZDUSD opened at 0.8069 and plunged early in the session to 0.8034 following CPI data that increased 0.4 percent in the third quarter from the previous three months. This was a negative surprise to the Reserve Bank and this adds to the case against policy tightening.