Forex News Review – Euro falls as Greece ends week with failure to form government

Important: This page is part of archived content and may be outdated.

Euro retreated against the dollar and erased all gains made during the U.S .session as concerns over Greece weighed on sentiment.  Investors sold off the single currency ahead of the weekend after news that the Greek Socialist party leader Evangelos Venizelos was unable to form a national unity government after holding talks with other party leaders today. It is now likely that another round of elections will be held soon. This political uncertainty is threatening the implementation of austerity measures in Greece and consequently the bailout package.

 

EURUSD swung from a New York session high of 1.2956 down to 1.2915.

 

Sterling fell to a three-week low against the dollar on damp risk sentiment due to Greece concerns as well as UK PPI data showing sticky UK inflation. GBPUSD fell to 1.6060, the lowest level since April 20.

 

USDJPY held onto gains made after data showing that U.S. consumer confidence in May rose to the highest level in over four years. EURJPY struggled to hold on to earlier gains and edged lower toward the end of US trading but hovered above support level 103.15.

 

The Canadian dollar rallied against its U.S. counterpart in early North American trading, after some surprisingly good jobs data which showed Canada added more jobs than expected in April. The Canadian economy created 58,200 jobs in April beating expectations of 10,000. The data increased expectations that the Bank of Canada could resume hiking interest rates. USDCAD fell after the data 0.9952 from 1.0053.

 

The Australian dollar fell against the U.S dollar towards parity after data from China today indicated fresh signs of weakness in the Chinese economy. This weighed on the commodity linked currency because China is a major export destination for Australia.  AUDUSD was briefly lifted to 1.0076 following the positive University of Michigan consumer sentiment data,  but was unable to sustain those levels and fell to 1.0021, close to a 4-1/2 month low hit earlier in the day.