Forex News Review – Euro extends losses as Europe crisis weighs market sentiment

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EURUSD extended its decline in to the Asian trading session as hopes that Europe will come up with a comprehensive plan to tackle its debt problems faded after French President Nicolas Sarkozy on Wednesday said talks to boost the bailout fund have stalled and no news has submerged following an emergency meeting with German Chancellor Merkel and other European officials last night. Adding to the negative sentiment was a report by the US Federal Reserve saying that US companies grew more pessimistic about the economy as shown by a survey. With risk aversion turning stronger EURUSD tumbled to 1.3709 from the Asian open price of 1.3756

 
GBPUSD opened in Asia at 1.5773 and fell to 1.5729 as a risk-off environment dragged sterling down. Renewed jitters over the European debt crisis and reports euro zone bank recapitalization at less than E100 billion kept the mood down.

 

USDCHF opened Asia at 0.9026 and briefly traded sideways until rising along with other USD moves to rally to 0.9070 as risk aversion pushed investors to the safe haven dollar. EURCHF consolidated gains to trade a 1.2412-40 range in Asia.

 

EURJPY opened in Asia at 105.69 and fell to 105.15 on overall euro weakness. USDJPY opened in Asia at 76.78 and continued to be trapped in a range since Monday, above 76.65 as the Japanese government is trying hard to limit yen appreciation.

 

AUDUSD continued to decline for a second day. The pair opened in Asia at 1.0220 after selling off in the NY session and extended its decline to 1.0172 in the Asian session as moves down in commodity prices, especially copper weighed on the aussie, which is a commodity price-sensitive currency. Australia is a copper and gold exporter.