Forex Market Review – Euro gains for third day, hits 2-week high

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The euro extended gains into the US trading session marking three consecutive days of gains against the dollar. Momentum accelerated after solid Spanish and French bond auctions earlier in European trading hours which eased worries about the ability of euro zone governments to refinance their debts. Spain, a highly indebted nation, managed to sell more than the target, selling 6.6 billion euros ($8.5 billion) of debt.

 

EURUSD opened New York trading, at 1.2900, up 0.5 percent on the day. Euro briefly dipped after positive data in US initial jobless claims lifted the dollar slightly. But risk appetite was bolstered further as the data also suggested the momentum for recovery was increasing in the world’s largest economy. EURUSD continued to 1.2965, hitting a new two-week high.

 

Against the yen, the euro reached 100.03 for the first time since January 4, up by over 1 percent. It has gained more than 2 percent since hitting an 11-year low on Monday.

 

Meanwhile, USDJPY finally broke out of the range and surged to 77.31 from 76.68, propelled by the fall in US jobless claims data.

The dollar also bounced against the Canadian dollar after the US jobless benefits numbers. Just before the US data, the Canadian dollar reached a six-week high against the greenback after  Canadian manufacturing data beat expectations in November to rise to their highest level since October 2008.  By the end of the US session, USDCAD rebounded to 1.0122 from the low of 1.0069.

GBPUSD edged up to 1.5491 from the day low of 1.5414.