Forex News Review – USDJPY plunges to 3-month low

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Euro went into the U.S. session with a $1.26 handle, after EURUSD hit a new four month- low of 1.2666. But a further decline was halted as the dollar lost some strength following weaker than expected U.S. data from the Philly Fed on U.S. Mid-Atlantic manufacturing. However, the single currency remains vulnerable amidst the turmoil in Europe, with markets focused on both Greece and Spain. There is increasing fear of contagion to Spain and Italy from the risk of Greece exiting the euro zone. Spanish bond yields surged today.

 

Sterling continues to weaken in reaction to uncertain Bank of England policy following a gloomy quarterly inflation report on Wednesday. If the BoE introduces more QE this would weaken the pound. GBPUSD fell to 1.5789, the lowest since March 22.

 

The yen posted sharp gains against the dollar and euro due to safe haven demand on concerns for banks in Spain and Greece . EURJPY dropped to 100.54, the lowest since February 6. USDJPY spiked down after the Philadelphia Fed data showed a more than forecast drop in its manufacturing index.  Dollar tumbled over 1 percent to 79.12, the lowest level since February 17.

 

The Canadian dollar weakened sharply against the U.S. dollar, down 0.6 percent, with USDCAD surging to a four-month high of 1.0190 in the North American trading session. The commodity-linked Canadian dollar has been weighed down by falling crude oil, which is a major Canadian export.