Forex Market Review – Euro hits seven-week high against yen

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The euro rose to a new eight-week high against the dollar in Asian trading as upbeat market sentiment overflowed into the Asian markets. On Tuesday, the single currency was boosted following news that huge progress was made in the Greek debt talks and that Greece is close to securing a 130 billion euros bailout package. Reports say that a draft agreement has been reached with international lenders and the Greek Prime Minister Lucas Papademos will put forward the final draft to the heads of three political parties in Athens today, for their approval.

 

EURUSD traded as high as 1.3285, its highest level since December 12.  The euro rallied sharply against the yen as well, hitting a seven-week high of 102.42 yen.

 

The yen was weaker also against the US dollar, following data showing that Japan’s current-account surplus shrank 44 percent in 2011 from the previous year to 9.63 trillion yen, the lowest since 1996. USDJPY rose to 77.14 after breaking strong resistance levels at 76.95.

 

Upbeat sentiment supported higher yielding currencies like the Australian dollar, which rose to 1.0833 against the greenback, its highest level since August 2. Another commodity-price sensitive currency, the Canadian dollar, strengthened to near Monday’s three-month high against the greenback. USDCAD hovered around 0.9939.

 

Sterling also rose on risk appetite, reaching a twelve-week high of 1.5917 against the dollar.

 

The ICE Dollar Index, which tracks the US dollar against a basket of currencies, was at 78.511 from 79.069, as risk appetite reduced demand for the safe haven dollar.