Posted on May 16, 2012 by Trading Point Investment Research Desk at 5:57 am GMT
Euro continues to be pressured by the political uncertainty in Greece and the increasing possibility of its exit from the euro zone. A last ditch attempt on Tuesday to form a coalition government failed which means the Greek people will have to go back to the polls with elections most likely in mid-June. There is a concern that the new government might not commit to austerity measures and put at risk the bailout plan.
EURUSD extended its decline in the Asian trading session and touched a fresh four-month low of 1.2697, the lowest since January 17. Euro is down 1.5 percent against the dollar since Monday.
EURJPY traded near a three-month low, ranging between 102.08 and 102.36.
EURGBP hovered near 3-1/2 lows of 0.7951 reached late in the US session on Tuesday.
GBPUSD tumbled to a low of 1.5955, down 0.8 percent since yesterday. Focus turns to the UK jobs report due later today. Weak data could further weigh on the pound.
The US dollar strengthened against most risk currencies due to safe haven demand. This lifted the ICE dollar index to 81.39, marking its longest stretch of gains in almost 40 years.
USDJPY rose to 80.38, up 0.6 percent since yesterday.
AUDUSD fell to a new four-month low, as far as 0.9903 as a result of the strong dollar and risk aversion, down from 0.9934 at the Asian session open.
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