The Euro rebounded slightly in Asian session, to lift above lows reached against the US Dollar in the earlier session. EURUSD steadied after coming under pressure from Eurogroup Chairman Jean-Claude Juncker mentioning that the Euro was over-valued. However, the weaker US Dollar is keeping the Single Currency from sliding further. EURUSD rose to highs of 1.4614 from lows of 1.4574.
Sterling continued to slide in initial Asian trading reacting to an IMF report which sees UK growth slowing this year to 1.5%, which will push the Bank of England maintain rates unchanged and possibly more tightening of monetary policy. GBPUSD then bounced in the later half of the session to close at 1.6355 around the open level of 1.6353. Lows were recorded at 1.6323.
The Dollar gained momentum against the Yen in Asia as the greenback is becoming a more attractive funding currency due to lower interest rates against the Japanese currency. USDJPY edged up to 80.31 from 80.09.
The Australian Dollar dropped 65 pips after news that the central bank (Royal Bank of Australia) announced it will hold interest rates unchanged at 4.75 percent. Although this was widely expected, there was no mention in the statement after the policy meeting of any signal on any rate hike in the future. The RBA said only that rates were appropriate given the economic outlook. AUDUSD dropped from highs of 1.0748 to 1.0683.
Gold steadied after a volatile prior session when it had risen to the highest level in a month to $1,553.33 before dipping abruptly to $1,541.28 then changed to a range in Asian trading. Investors are most probably awaiting U.S Fed Chairman Ben Bernanke’s speech later today on the U.S. economic outlook. Gold is traditionally seen as a safe haven investment in times of uncertainty, and has been in demand recently on concerns that the US economy may be slowing down.
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