Forex Asia Review – Eurozone crisis keeps risk off; EURUSD near 2-year lows

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Euro consolidated during the Asian session, hovering just above 2 year lows after a sharp sell off during the U.S. session as market players prefer not to hold onto the currency over what is a long holiday weekend for many. The euro is about to end the week with the biggest weekly losses against the dollar this year, as it is under pressure by the euro zone debt crisis and uncertainty regarding Greece and its possible exit from the euro zone.

 

Disappointing economic data yesterday suggest the euro zone economy is showing signs of a slowdown.EURUSD opened in Asia at 1.2531 after losing 0.8 percent in the prior U.S session, and traded sideways.

 

GBPUSD opened the session at 1.5664 and edged down to 1.5646, close to two-month lows. Sterling was hurt yesterday after UK first quarter GDP was revised lower, confirming the British economy is in a recession.

 

Yen fell against the dollar after a report showed CPI in Japan, excluding fresh food, climbed 0.2 percent in April, which is far above the Bank of Japan’s  1 percent inflation target.  Bank of Japan governor Masaaki Shirakawa said on Thursday that the BOJ was committed to maintaining its ultra-loose monetary policy. USDJPY rose to 79.81 from 79.52. EURJPY traded between 99.69 and 100.04.

 

The Australian dollar reversed gains made in the earlier U.S. session against the dollar as damp sentiment weighed on the risk sensitive aussie. AUDUSD fell to 0.9724, coming close to the six-month low of 0.9688 hit on Wednesday.