Forex Asia Review – Euro holds onto gains, lifted by weak dollar

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Euro consolidated gains made after the dollar weakened when the US Fed Chairman Ben Bernanke, who was speaking at a press conference following the FOMC meeting yesterday,  signalled that he left the door open for more quantitative easing should it be necessary.  Bernanke noted that unemployment in the US is expected to remain well above target by the end of 2014. This means that there is scope for further monetary easing down the road.

EURUSD traded a tight range in the Asian session, between 1.3214 and 1.3232.

 

Sterling held onto gains after rallying to a seven-month high against the dollar. GBPUSD peaked 1.6181 in the US session and  hovered around that level in Asian trading, remaining above 1.6157.

 

USDCHF was little changed in Asia and traded between 0.9079-90, holding close to a three-week low.

 

USDJPY opened in Asia at 81.33 and eased  to 81.10 on profit taking and is expected to remain steady ahead of the Bank of Japan policy meeting tomorrow. EURJPY was steady above 107.25.  The BOJ is expected to introduce new  easing measures and it will likely announce an increase in asset purchases. This will weaken the yen.

 

AUDUSD extended gains to climb to a high of 1.0373 after getting a lift from a weaker greenback following the Fed policy meeting .

 

The New Zealand dollar rose despite the Reserve Bank of New Zealand announcing its left interest rates at a record low. The USD softness helped the kiwi remain firm. NZDUSD rose to 0.8175, moving well off a one-month low 0.8087 reached on Monday.