Forex Market Review – Euro briefly rises above $1.26 but rally short – lived

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Euro rises above $1.26, lifted by news over the weekend of the pro-bailout Greek party leading in the opinion polls. This helped boost risk sentiment as fears eased over the possible Greek exit from the euro zone. However, the euro was unable to sustain the rally and was weighed down by rising Spanish bond yields, with the 10-year yield spread hitting a record high above 6 percent. The single currency remains vulnerable until the Greek election on June 17.

 

EURUSD hit a high of 1.2623 in the early Europe session before dipping to 1.2564. Trading volumes are light going into the U.S. session as markets are closed for the Memorial Day holiday. Many markets were closed in Europe as well for a public holiday.

 

Sterling heads into the North American session, having gained 0.2 percent  since Friday’s close. GBPUSD hit a high of 1.5715just before the Europe session.

 

The dollar settled into a range in the Europe session after falling sharply against the yen in the Asian session. USDJPY traded between 79.32 and 79.42 after the yen gained strength following the Bank of Japan policy meeting minutes earlier today, indicating a less aggressive stance on policy easing.

 

EURJPY hit a high of 100.21before easing back down to 99.70 as euro gains began fading across the board heading in to the U.S. session .

 

The Canadian dollar was buoyed by higher commodity prices, especially crude oil, which is a major Canadian export. USDCAD fell to 1.0222 in European trading hours, down 0.3 percent so far on the day. Direction for the loonie will be driven by Canadian March GDP data due on Friday, as well as the monthly US jobs report.

 

Aussie was one of the biggest gainers today, bouncing off six-month lows versus the greenback due to improved risk appetite. AUDUSD hit a high of $0.9887 in the Europe session, up 1.3 percent from the Friday close.