Forex Market Review – Euro vulnerable ahead of Greek elections

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Euro remained steady above $1.26 during the European session supported by a pledge of major central banks to prevent a liquidity squeeze if necessary after the Greek elections on Sunday. EURUSD opened in Europe at 1.2633 and was supported above 1.26 before breaking below in the US session overlap. The single currency remains vulnerable ahead of alot of uncertainty about the outcome of the Greek vote. There are concerns that depending who wins, Greece’s membership in the euro zone will be at risk.

 

 

Sterling remains weaker after the Bank of England Governor Mervyn King announced on Thursday new measures to lend cheaply to banks. He stated that these measures could involve additional QE, which would result in a weaker pound against its counterparts. GBPUSD touched a low of 1.5475 during the London session and a high of 1.5564.

 

 

Yen extended gains against the dollar. USDJPY fell to 0.5 percent  to 78.60 since the Bank of Japan announced it kept monetary policy unchanged.  Many market participants had been expecting the BOJ to ease policy in order to stimulate the Japanese economy, which would have resulted in weakening the yen. EURJPY fell back below the key 100.00 yen level to touch 99.09.

 

 

Aussie benefitted from a pick-up in risk appetite and extended higher in the European session. AUDUSD gained 0.2 percent on the day to hit a one-month high of 1.0052.