Forex Asia Review – Franco-German summit, SNB news report help lift euro

Important: This page is part of archived content and may be outdated.

The euro rallied against the Swiss franc to rise to a two week high after a Swiss newspaper report over the weekend that the Swiss National Bank intends to set a target at a little over 1.10 francs per euro in an effort to curb franc strength. EURCHF opened Asia with a gap from the Friday close of 1.1085, beginning the session at 1.1170 and rising to a high of 1.1285.

 

EURUSD was lifted after the Swiss National Bank proposal to put a floor on the euro/swiss pair. General upbeat risk sentiment after Asian stocks rose also helped the Single currency advance. EURUSD opened Asia at 1.4249 and hit a high of 1.4318 before dipping to 1.4310. Meanwhile, investors are focused on the Merkel – Sarkozy meeting, with hopes that Europe is going to get its act together and coordinate policy in order to contain the eurozone debt crisis.

 

GBPUSD opened in Asia at 1.6273 and rose early in the session on improved risk appetite before settling in a range and see-sawed between 1.6270-1.6303. Against the euro, Sterling was weaker. EURGBP opened at 0.8762 and traded higher to 0.8789 due to the SNB report and speculation of a Swiss franc peg to the euro. The pair then fell to 0.8769.

 

USDJPY rose to 77.09 before it fell back to around where it initially was and closed at 76.80. There was not much reaction to the better than expected Japanese second quarter GDP data as investors were still a little spooked after a turbulent past week and threats of BOJ intervention to stem yen strength. The Japanese Obon holiday in combination with European holidays resulted in light volumes.

 

The Australian dollar rose against the greenback as Asian equity markets rise giving a better market sentiment that spilled over to FX markets. As investors unwound safe haven positions and switched to higher yielding assets, this helped support the Australian dollar. AUDUSD opened Asia at 1.0364, peaked at 1.0433 and closed at 1.0421.