Forex Asia Review – Yen gains after better than expected production data

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The Euro hovered around its five-day high against the Dollar, slightly slipping throughout the Asian trading session as investors stopped buying up the Single Currency ahead of the Greek parliament vote on austerity measures later tonight. Even though many are optimistic that the Greek Prime Minister will get the votes required to pass the measures, many investors prefer to be cautious and take a wait-and-see approach. However, the Euro is well supported following ECB Trichet’s speech yesterday which signalled that an interest rate hike is imminent as soon as next week. Also, the French proposal of rolling over maturing Greek bonds helps support the Euro. EURUSD opened the Asian session at 1.4370 and reached a high of 1.4376 by the end of the session.

 

Sterling remained in a range against the Dollar as investors are awaiting the outcome of the Greek austerity vote later today. Meanwhile, EURGBP hovered around its eight-week high as the Single Currency looked more promising than the Pound, especially with the ECB signalling a rate hike by next week, in contrast to the Bank of England giving a dovish outlook and will not likely raise rates any time soon. EURGBP opened at 0.8979 and closed at 0.8978.

 

The Yen gained against the Dollar over night, helped by Japan’s preliminary industrial production recording the second biggest increase in May as manufacturers restore production, giving evidence that the Japanese economy could be slowly recovering from its slump caused by the devastating earthquake in March. Output increased in May by 5.7 percent versus a previous 1.6 percent growth, and much better than the expected 5.5% rise. USD edged down to 80.92 from 81.11

 

The Australian Dollar’s two day rise against the greenback was capped at 1.0550 in Asian trading. Optimism on the Greek vote later will likely keep the Aussie supported for now . Gold has also remained flat, its price normally will affect the AUD since it is a commodity-linked currency. AUDUSD opened the session at 1.0539 and closed up at 1.0539.

 

Gold trading was pretty flat for most of the session. The precious metal is being supported by light buying from investors who are being cautious about the Greek austerity vote tonight. Lack of new fundamentals or other major news for now will likely keep gold in a range. Spot gold traded the session between $1,504.76 and $1,500.08.