Forex Europe Review – Euro remains steady on hopes of stemming debt crisis

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Forex Asia Review - Euro temporarily retreats from recent losses; Euro debt woes still persistEURUSD hit a new one week high as the pair was on the upside today on news that the EU is making serious efforts to tackle the debt crisis. Greece made progress in meeting requirements for additional international aid and Germany has pledged continued support for the debt-ridden economy. Euro was further boosted after EU Commission President Barroso said the ECB will do whatever it takes to ensure stability in the euro zone. Meanwhile the troika (EU-ECB-IMF) officials will return to Greece on Thursday as part of the process of approving further aid and the Eurogroup of finance ministers will hold an additional meeting in October to discuss Greek finances and further disbursement of aid. EURUSD rose to session high of 1.3689 from the 1.3555 open.

 

GBPUSD consolidated after making gains in the US session yesterday but soon tracked higher in late London trading today on the back of the EURUSD pair to peak at 1.5673. Sterling has moved well off a one-year low hit versus the dollar last week, but it may face more selling pressure due to rising speculation that the Bank of England may implement more monetary stimulus before year-end to boost the struggling economy.

 

EURCHF move up today on a stream of good news from Europe which helped boost the euro slightly to 1.2222 before easing off. But movements were small and contained within a range, as was the case with USDCHF which was supported above 0.8925. Price action in most major CHF pairs remains muted as investors wait for Thursday’s vote in Germany on widening the scope of the European Financial Stability Facility bailout fund.

 

The Australian dollar rose against its US counterpart in Europe trading after falling in Asia as risk sentiment picked up again on hopes that Europe’s debt crisis is in the process of being resolved. By late session the pair eased as profit taking ensued and AUDUSD fell from 0.9953 to 0.9890.

 

Yen weakened against the euro as risk appetite picked up on hopes that Europe is working hard towards stemming the debt crisis and most importantly trying to avert a banking crisis. EURJPY hit a European session high today of 104.50 versus the 103.81 opening level. USDJPY remains range bound for over a week now between 76.90 and 76.10.