Euro has rallied substantially against the dollar since its Friday’s 2-year lows on market rumours of a new “master plan” for Europe to tackle the sovereign debt crisis. There is optimism that Germany will take a softer stance and concede to a plan. Also there are rising expectations for another LTRO. More is expected to be revealed after Wednesday’s European Central Bank meeting. Meanwhile, today the euro zone Sentix investor confidence index fell for a fourth straight month but came in better than expected. EURUSD opened in Europe at 1.2417 and edged up to 1.2445.
Cable saw little movement during the Europe session given that London markets are closed for holidays until they reopen on Wednesday due to the Queen’s Jubilee celebrations. GBPUSD opened at 1.5366 and climbed to 1.5387.
USDJPY was little changed during the session, as yen failed to gain further strength on broad‐based given rumours of a Bank of Japan intervention. The pair opened Europe at 78.15 and after a dip to 77.97 headed back to previous levels going into the North American session. EURJPY began trading in Europe at 97.05, dipped briefly and regained losses to start the U.S. session close to 97.20 as euro was better bid across the board.
Aussie is up almost 1 percent since the Asian session low, with AUDUSD climbing to a high of 0.9721 going into the New York trading session. The Reserve Bank of Australia policy meeting tomorrow will be in focus.
The Canadian dollar is essentially flat versus the greenback from Friday, after having touched a new six‐month low in the Asian session. Friday’s weak Canadian GDP combined with the escalation in Europe, has cemented a more dovish expectation from the Bank of Canada this week. USDCAD is down 0.6 percent since the morning, reaching 1.0375 in Europe trading.