Forex Market Review – Euro erases earlier losses on bullish Bernanke speech

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Euro had a choppy day against the dollar and has failed to break past the $1.32 level. EURUSD has been range bound all week, with lack of any significant news to produce a breakout. So far with no news on the Greek debt swap talks, investors remain on the sidelines. However, an opportunity for some major movement should arise from the key US jobs report tomorrow, the Non-farm payrolls.  A stronger jobs report is expected to lead to dollar selling as this would indicate a stronger economy and therefore lift risk currencies like the euro.

 

In today’s US trading session, EURUSD bounced from 1.3084 and edged higher to 1.3186 after Federal Reserve Chairman Ben Bernanke’s testimony to Congress on the U.S. economy. Bernanke appeared more bullish than expected by saying the recovery was continuing, and thereby raising market sentiment.

 

Yen remained strong and continued to pressure the dollar near a three-month low touched on Wednesday. USDJPY has been trading sideways in a tight range after touching a post-Bank of Japan intervention low of 76.01. Dollar failed to go lower on fear that Japanese authorities may intervene to curb yen strength, as they did on October last year.

 

The Canadian dollar was little changed against the greenback for most of the day as investors prefer to wait on the sidelines due to too much uncertainty in the market. Many prefer to wait for more developments regarding the Greek debt situation. Also both the Canadian and US jobs data are out tomorrow which will have a big affect on both currencies. USDCAD traded close to parity, between 1.0009 and 0.9971.