Forex Market Review – Yen weakens; euro remains firm on Greece hopes

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The yen was  the worst performing currency in Asian trading hours, weakening against all its major counterparts, reaching the weakest in more than three months against the dollar, and the lowest in seven months against the Australian dollar. Demand for the safe haven yen fell as gains in Asian stocks and positive US data as well as renewed optimism on Greece, all triggered risk sentiment.

USDJPY opened in Asia at 78.89 and pushed higher to 79.16, the highest level since the October 31 Bank of Japan intervention in the currency markets last year. EURJPY rose to an over two month high of 104.01 from 103.62.

The euro also remained firm as a bailout for Greece appeared more likely to go ahead.  After a 1.4 percent increase in the US session to a high of 1.3157, EURUSD consolidated gains in the Asian session hovering above  1.3121.

GBPUSD edged slightly higher than the New York session high and peaked at 1.5817 in Asia.

Speculation remains strong that Greece will get some kind of financial aid by Monday as reports on Thursday showed that the European Central Bank might swap its Greek debt holdings for new bonds . There is a sense that some kind of solution will be reached before the March 20 deadline for a EUR14.5 billion bond redemption  and thus avert a default.

The focus turns to the Euro group meeting on Monday when euro zone finance ministers are expected to make a decision on the 130 billion second bailout package.

The Australian dollar was sharply higher following positive leads from US economic data overnight and a growing consensus that the final detail on a Greek bailout will emerge early next week. AUDUSD hit a session high of 1.0797 from 1.0743.