The U.S. trading session was quiet due to most US markets being closed for the Thanksgiving holiday. With liquidity at exceptionally thin levels, global traders were not willing to take on new positions.
Euro fell 0.5 percent to a fresh seven week low against the dollar after German Chancellor Angela Merkel reiterated that she remains opposed to the use of jointly issued euro bonds. She said “Euro bonds “would weaken us all.” At a meeting with Sarkozy and Mario Monti to discuss the eurozone debt crisis, she said she is firm on her position against changing the role of the European Central Bank. This disappointed many who believe that euro bonds would help ease the debt crisis. EURUSD fell to 1.3315. Earlier in the day, euro was lifted to a high of 1.3410 after the German Ifo business report showed business confidence improved and economic growth accelerated.
Against the yen, euro fell for a second day to a new seven-week low of 102.69. The pair had hit a high earlier in the day at 103.44 based on the German Ifo report but later erased all gains.
Sterling hovered at a seven-week low against the dollar. The revised GDP confirmed the UK economy grew 0.5 percent in the third quarter, but business investment and exports fell sharply. Bank of England policy maker, Ben Broadbent commented that the UK economy will slow in the fourth quarter and chances of falling into a recession are high. GBPUSD fell from a day high of 1.5565 to form a tight range by the US session, hovering at the seven-week low of 1.5483.
The Canadian dollar steadied today and halted its losing streak against the US dollar as USDCAD reached resistance levels at 1.0490. The loonie was supported by rising crude oil prices today, which rose 1.7 percent to US$97.29 a barrel. This was due to crude oil supplies falling, as shown by the EIA inventory report. Canada is a major oil exporter and so the CAD is sensitive to oil prices.