Forex Market Review – Euro ends day higher, off 2-year low

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Euro ended the week on an upbeat note, bouncing off two-year lows and jumped 0.7 percent to rise back near the mid-week levels.  Earlier in the day the single currency was under pressure after Moody’s downgraded Italy’s ratings and growth data from China GDP was soft though expected, and not enough to boost risk appetite.

 

In the U.S. session, June PPI data showed whole sale producer prices exhibited the first increase since March, ticking up 0.1 percent. This gave rise to speculation whether this suggests inflation pressures and could leave the the door open for more easing by the Federal Reserve.

 

EURUSD climbed from a two-year low of 1.2161 to hit a high of 1.2255. There were market rumours that the ECB bought huge amounts of EUR. Some traders explain the reason behind the jump was mainly due to short covering ahead of the weekend.

 

GBPUSD rallied sharply to a high of 1.5579 from the day low of 1.5412. Sterling was boosted after the Bank of England released the details of its lending plan, which will boost credit by 80 billion pounds to companies and households, with the aim of stimulating the sluggish UK economy.

 

USDJPY dipped to 79.06 after the U.S. PPI data in the New York trade, before regaining some losses.

 

Aussie gained over 1 percent today versus the greenback after data showed the Chinese economy grew 7.6 percent  in the second quarter, in line with expectations. China is Australia’s single largest export market. AUDUSD rose to 1.0228 from 1.0121.