Forex Market Review – Euro falls below $1.30 on Moody’s threat to banks

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The euro broke below the key $1.30 level against the dollar to touch a three week low on damp risk sentiment as the Greek bailout uncertainty lingers and several European banks were placed on review for a downgrade by Moody’s.

EURUSD opened in Europe at 1.3004 and fell to 1.2973, its lowest level since January 25. EURGBP tumbled to 0.8277 from 0.8299.

Greece must repay 14.5 billion euros of debt on March 20, which it cannot do without the help of international aid. But the EU has delayed signing off o the 130 billion euro bailout deal this week and delayed a decision until the Eurogroup meeting on February 20 in Brussels.

Risk aversion due to Greek worries buoyed the safe-haven dollar, which pushed the ICE dollar index to a three-week high of 80.078.

A further decline in the euro was prevented after the US reported lower jobless claims for last week, which fell to a four-year low. Also US housing starts rose more than expected in January. The positive data helped lift sentiment at the end of European trading and gave a good start to the US trading session.

Dollar rose against the yen, with USDJPY hitting a 3-1/2 month high of 78.93. The US jobs data boosted and already buoyant dollar from the minutes of the Federal Reserve’s January policy meeting on Wednesday which showed a few officials believed another round of quantitative easing.

USDCHF rose to 0.9299, the highest level since January 25.

GBPUSD traded sideways in the London session, supported above 1.5658.