Euro fell against the dollar in the Asian session, approaching near a two-year low as risk appetite was damp in the absence of any positive news. The Eurogroup meeting of euro zone finance ministers offered nothing new. No progress was made on activating the euro zone rescue funds to intervene in bond markets to bring down the spiralling borrowing costs for Spain and Italy.
Meanwhile, China trade data showed very weak imports, pointing to slowing domestic demand and raising concerns over global growth. The news dampened risk appetite even further.
EURUSD opened in Asia at 1.2311 and drifted lower to 1.2281. Looking ahead, we have French and Italian industrial production data due later today.
GBPUSD opened the session at 1.5524 and fell to a low of 1.5497. UK manufacturing data due later will be in focus.
USDJPY opened at 79.54 and dropped to 79.46 as safe have flows to the yen kept the Japanese currency stronger.
The Aussie dollar weakened after disappointing Chinese trade data. China is Australia’s single largest export market is always a key mover of the commodity currency. AUDUSD dropped from 1.0209 to 1.0159. China’s imports in June grew at half the expected pace, at 6.3 percent from a year ago versus 12.7 percent forecast.