The euro was able to recover all of Tuesday’s losses against the dollar, after gaining relief by comments from European Central Bank Executive Board member Benoit Coeure. He said that the ECB bond-buying programme (SMP) remains an option to reduce Spain’s borrowing. Italian and Spanish bond yields fell, and the German bond auction went relatively well considering the current environment.
EURUSD hit a European session high of 1.3155 rising from the open level of 1.3099. If Spanish bond yields go back above 6 percent euro dollar would probably break below the range it has been trading in this week.
GBPUSD opened at 1.5884 and climbed to 1.5936, lifted by better risk appetite. UK Trade balance data due tomorrow are key to giving direction to sterling.
USDJPY fell to a six-week low of 80.56 as the yen was supported by safe-haven flows due to concerns about global growth and after the Bank of Japan refrained from further monetary easing on Tuesday. However there is market talk that the BOJ may ease policy in its next meeting, which could put the yen back under pressure. EURJPY hovered near one-month lows touching 105.54.
AUDUSD see-sawed in European trading hours but is overall trading higher compared to yesterday’s European session. Australian unemployment data due tomorrow could change aussie direction. AUDUSD hit a high of 1.0316, up from the Asian session low of 1.0224, which was a three-month low.