Forex Market Review – EURUSD little changed after hitting 8-week high

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EURUSD stalled after hitting a two-month high of 1.3287 to consolidate gains as no new updates came out regarding the Greek bailout deal.  Investors prefer to wait on the sidelines until they hear that the 130 billion euro deal has been signed, that will prevent Greece from defaulting. Optimism is buoying the single currency though patience is wearing thin. Positive news could boost euro higher but the currency is vulnerable to any negative news that could arise from other indebted euro zone countries like Portugal and Spain.

 

Immediate key events tomorrow are the euro zone finance ministers meeting in Brussels as well as the European Central Bank policy meeting.  While the central bank is not expected to change rates or policy in this meeting, they are expected to signal where policy will head to in the future.

 

Sterling weakened against the euro and the dollar. GBPUSD tumbled from a twelve week high of 1.5927 to 1.5796 as the pound is being sold off ahead of Thursday’s Bank of England policy meeting. The central bank is expected to expand quantitative easing by another 50 billion pounds, which will have a weakening effect on sterling.

 

EURGBP rose to a one-week high of 0.8387 in New York trading from 0.8342.

 

Yen clawed back some losses in the US session to bounce from a low of 76.71 to 77.07. USDJPY hit 77.17 in early European trading.

 

The Canadian dollar weakened against its US counterpart in North American trading after crude oil prices dropped shrarply following a report from the US Energy Department that inventories climbed as a result of fuel consumption dropping to the lowest level in almost 13 years. The loonie is a commodity-linked currency since Canada is a major oil exporter.