The euro was lifted in Asia after Japanese news agency Jiji reported that G20 officials would release an emergency statement showing their intent to cooperate internationally to prevent a worsening of the euro zone’s debt crisis. Jiji quoted an unnamed source as saying G20 finance ministers and central bankers meeting in Washington were working toward issuing an emergency statement after their meeting. The G20 pledge to expand the powers of the EFSF rescue fund by the time of the group’s next gathering, scheduled for October 14. The EURUSD climbed to a session high of 1.3566 before easing off.
GBPUSD opened Asia at 1.5337 and immediately set a fresh one year low of 1.5326 before heading higher on hopes that the G20 would provide some sort of relief for the EU debt problem. Cable peaked at 1.5431.
AUDUSD opened in Asia at 0.9736 and moved off eight month lows. The pair was lifted to 0.9862 by improved risk sentiment on news that the G20 would issue an “emergency communique” addressing the EU debt crisis. Also, the Reserve Bank of Australia said the country’s banking system was well placed to weather the current turmoil in world financial markets, and can better cope than it did in the 2008 crisis though it did caution banks against taking on too much risk and told shareholders to get used to slower profit growth.
EURJPY bounced from a ten year low hit on Thursday as a result of the Fed statement, moving to a high of 103.44 from the 102.63 Asian open. Euro was lifted against the safe haven yen as sentiment improved on news that the G20 was committed to supporting the global financial system. USDJPY traded in a tight range with light volumes due to the Jpan bank holiday celebrating Autumn Equinox Day.