Forex Asia Review – Euro advances higher despite Spain downgrade by Moody’s

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EURUSD overall advanced higher in the Asian trading session after a brief dip early on in reaction to Moody’s downgrading Spain. There was also disappointment when a previous report that said EFSF was to be boosted to 2 trillion euros was later said to be false. But EURUSD quickly recovered to rise to as high as 1.3811 from 1.3652.

 
GBPUSD opened in Asia at 1.5715 and initially dipped to 1.5694 to trade in a range thereafter until it headed higher later to 1.5751 as sentiment in Asia had picked up. EURGBP opened at 0.8750 and also initially dipped to 0.8739 before bouncing later to 0.8770.

 

USDJPY opened in Asia at 76.81 and plunged to 7.64 on risk aversion after negative news on Spain downgrade, denial of EFSF boost, and low Apple earnings. Soon the Nikkei moved higher on news of the Japan-Korea deal on larger currency swap arrangements in a bid to to help ease market tension. The more than five-fold expansion of the swap arrangements will lift the amount of foreign currency that South Korea can immediately mobilise in case of emergency. USDJPY finished up at 76.69.

 

AUDUSD continued to rise steadily in Asia after a strong rally in the previous NY session. The pair opened 1.0260 with a brief dip to 1.0231 on the negative news out of Europe (Spain downgrade, no firm agreement boost to EFSF yet) before rising again with other risk currencies as risk appetite improved as Asian stock markets moved higher on news that Japan and Korea agreed on larger swap facilities. AUDUSD closed up at 1.0312.

 

NZDUSD opened in Asia at 0.7954 after making solid gains in the US afternoon alongside equities and commodities. It fell to 0.7926 early on a string of negative news but rising Asian equities and bargain hunters bought up the kiwi on the dip to soon lift the pair to 0.7980.