Forex Market Review – Euro extends losses on eve of EU Summit

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Euro slid towards a two-week low against the dollar as the upcoming EU Summit has cast a shadow over the market. Risk sentiment is low as investors do not expect any solutions to the euro zone debt crisis at the two-day summit that begins on Thursday.

 

Meanwhile Italian and Spanish borrowing costs have been rising in recent weeks.  Growing concerns that more peripheral euro zone nations will be shut out from capital markets will keep the euro under pressure.

 

EURUSD has spent most of the U.S. session stuck in a 20-pip range after dipping early in the session from 1.2493 to 1.2444.

 

Sterling is down 0.5 percent on the day against the dollar, weighed down by the general risk-off mood of the market. GBPUSD fell to a low of 1.5545 in New York trading hours.

 

USDJPY got a lift after positive U.S. economic data which showed U.S. durable goods orders rose 1.1 percent in May, the first increase in three months. Dollar rose 0.3 percent in the U.S. session to hit a high of 79.85. EURJPY has been confined in a range all day between 99.30 and 99.60.