Forex Asia Review – Euro back above $1.25 in pre-EU summit rally

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Euro gained 0.4 percent against the dollar during Asian trading, moving back above $1.25. However, the pre- EU summit rally will likely be limited as European Union leaders go into the meetings divided over the issue of joint euro bonds and expectations of a breakthrough are very low.  A lack of progress in resolving the euro zone debt crisis could push the single currency lower.

 

EURUSD opened the Asian session at 1.2467 after bouncing from yesterday’s low of 1.2444. The pair moved higher through the Asian morning and traded up to a high of 1.2523.

 

Cable also bounced alongside EURUSD, lifting GBPUSD from 1.5565 to 1.5597.

 

USDJPY came under pressure early in the Asian session when the dollar was sold across the board as the market repositions ahead of the EU summit. USDJPY fell to 79.32 from 79.74, erasing all gains made after a boost from positive U.S. durable goods orders data yesterday.

 

EURJPY was little changed in the session, trading between 99.14 and 99.46 as markets wait for the EU summit.

 

The Australian dollar hit four-month high against the euro and a one-week high on the U.S. dollar,  lifted by  short covering. The euro fell to A$1.2337, the lowest since March 5. Against the greenback, the Aussie climbed about 0.3 percent on the day to $1.0125. Some positive Australian economic data helped. New Home Sales rose 0.7 percent in May.