The euro climbed back up near the day high against the dollar in the North American session following new liquidity and financing measures from the IMF to protect members from the euro zone debt crisis. Such a move would help contain the crisis and ease investor concerns. EURUSD moved off the session low of 1.3481 to rise to a high of 1.3515.
The new IMF funding rules helped euro hold firm against the yen, trading higher than on Monday. EURJPY traded above 103.90 and hit as high as 104.26. The dollar hit a low of 76.93 yen following the Federal Reserve minutes of the last policy meeting, falling from the session high of 77.12.
Sterling fell 0.5 percent against the dollar in the US session to dip to a fresh six-week low before bouncing back up to previous levels. Damp risk sentiment weighed on the pound which is vulnerable ahead of the Bank of England minutes due on Wednesday. There is speculation that the central bank will signal further quantitative easing amid increasing concern that the UK economic growth outlook is deteriorating. This would result in a weaker currency. GBPUSD dipped to 1.5581 before bouncing to prior levels to close at 1.5635.
The Canadian dollar gained 0.6 percent against the US dollar due to data showing Canadian retail sales in September were better than expected. The loonie, which is a commodity-linked currency, was among the biggest winners versus the greenback after crude oil rose for the first time in four days. Oil is Canada’s biggest export. USDCAD fell to 1.0345 from 1.0412.
Disappointing US third quarter growth data gave some pressure on the dollar today. U.S. gross domestic product grew at a 2 percent annual rate from July through September, less than forecast and down from a previous 2.5 percent estimate. Meanwhile the Fed policy meeting minutes from the November 2 meeting indicated that some Fed policy makers believed that there should be more quantitative easing. The dollar index which measures the U.S. dollar against a basket of six major currencies, declined to 78.192 from 78.267 in late North American trading on Monday.