After a sluggish day yesterday the Euro jumped to a three-week high against the US Dollar in Asian trading hours. A report in the WSJ that Germany will facilitate a new bailout package and help put together a loan deal eased concerns about Greece defaulting. This boosted the EURUSD to surge some 125 pips to 1.4405 from 1.4282.
Sterling recorded gains against the US Dollar climbing from 1.6472 to 1.6546. After a slow trading day yesterday due to UK markets being closed for the Spring bank holiday as well as the US markets were closed for Memorial Day so investors were eagerly waiting their reopening. Good news from Europe regarding the Greek bailout gave optimism to investors again, helping lift the Pound against a weaker Dollar by some 78 pips during the Asian session.
The Japanese Yen slipped against the US Dollar after Moody’s rating agency said it is considering downgrading Japan’s outlook on debt to negative. This follows a previous threat to downgrade by Fitch, another ratings agency. From low of 80.70, USDJPY jumped to 81.36. Meanwhile, a slew of economic data was released from Japan showing a drop in household spending and a slight rise in the unemployment rate.
The Australian Dollar rose by 70 pips against the US Dollar to a high of 1.0756 before dipping after the release of disappointing economic data down to 1.0699. Worse than expected data on Australia’s current account indicated that the economy contracted in the first quarter. Approvals to build new homes also were down 1.3 percent.
Gold initially rose by almost $4 to almost hit a new four-week high at $1,540.38 before dipping down to $1,534.38. As fears eased about Greece’s debt concerns following a report stating Germany would be helping out, investors were more willing to shift to riskier investments away from safer gold.