Forex Market Review- Euro tumbles to 11-month low; dollar gains after Fed statement

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Euro fell sharply against the dollar to the lowest level since January in the US session. EURUSD began its sharp descent at the beginning of the North American session following reports that German Chancellor Angela Merkel reiterated her opposition to raising the lending limit for the European Stability Mechanism, Europe’s permanent bailout fund.

 

EURUSD extended losses after the Federal Reserve said the US economy is expanding moderately and did not take additional measures to spur growth. With no further quantitative easing this means the dollar will not weaken. Also the FOMC kept interest rates unchanged at 0.25 percent, the same rate since December 2008. These factors kept the dollar supported.

 

EURUSD fell to an eleven-month low of 1.3008 from the New York open of 1.3207. The pound rose to as high as 83.99 pence per euro, the strongest since February 22.

 

The dollar index which measures the performance of the greenback against a basket of six currencies, turned up to 80.303 from 79.533 in late North American trading on Monday.

 

Dollar rose 1.03 percent against the British pound in the session as GBPUSD fell to 1.5450.

 

USDJPY rose to 77.99 from 77.63

The Swiss franc reached the weakest level against the dollar since February. USDCHF rose to 0.9477 from 0.9350.

Canada’s dollar dropped to its lowest level this month as USDCAD rose to 1.0347 from 1.0230.

Gold fell over 2 percent to $1,622.34 from the session high of $1,667.05.