Forex Market Review – USDJPY hits 6-month high; crude oil at 9-month high

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The euro stayed strong against the dollar in the North American trading session touching slightly higher at $1.3196 before consolidating around $1.3145. Gains were limited ahead of the Eurogroup meeting in Brussels on Monday with investors hesitant to take on new positions before a long holiday weekend in the U.S.

 

The euro has gained over 1.7 percent against the dollar since Thursday on renewed hopes European leaders will agree to a deal on a second bailout for Greece by early next week.  Greece has a 14.5 billion euro bond redemption payment due on March 20, and therefore requires financial aid to avert a disorderly default.  A Greek bond swap reportedly being conducted by the European Central Bank has accelerated progress on the deal.

 

Meanwhile, upbeat market sentiment due to better economic fundamentals in the U.S. also helped buoy the euro against the dollar. Today, CPI data reported higher in January as expected.

 

The British pound rose against the dollar after Britain’s Office for National Statistics reported an unexpected 0.9% jump in January retail sales volumes.GBPUSD rose to a day high of 1.5861 before steadying off.

 

The Japanese yen lost further ground against the dollar after dovish comments from the Bank of Japan governor, Masaaki Shirakawa, who said that the central bank would keep monetary policy loose. USDJPY rose higher to 79.60, the highest level since August 4.  EURJPY climbed to 104.65, the highest level since December 5.

 

The Canadian dollar traded firmer against its US counterpart today versus Thursday, helped by higher crude oil prices. USDCAD touched as low as 0.9940. Crude oil which is Canada’s biggest export,  climbed to a nine-month high today, hitting US$103.83.