Forex News USA – Euro, sterling, Canadian dollar make big gains on G20 hopes

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Forex Economic News: China’s Manufacturing PMI experiences slower expansionEURUSD rose to a new one-month high in the US trading session on increased risk appetite as the G20 Summit gets underway in Paris. There is optimism that the group will discuss some kind of plan to deal with the sovereign debt crisis. Euro marked its biggest weekly gain versus the dollar since January, rising almost 4 percent on the week. EURUSD hit a session high of 1.3893 from the session open of 1.3791.

 

GBPUSD climbed to a one-month high, peaking at 1.5851 in the US session, mirroring the move up by EURUSD. The pound rose to $1.5851, 03, its strongest since September 15. Risk appetite improved a better-than-expected reading of U.S. retail sales increased demand for currencies perceived to be higher risk, like the pound sterling.

 

The Canadian dollar strengthened to its highest level in three weeks against the US dollar, after both Canadian and U.S. economic data were released today with better- than- forecast results. Canadian manufacturing sales recorded gains for a second straight month in August, at nearly three times the pace as expected, while US retails sales also rose more than predicted, creating an improved market sentiment. The US data also lifted oil prices, which further boosted the Canadian dollar since Canada is a major oil exporter. USDCAD fell to 1.0100 from an early US session high of 1.0179

 

USDJPY surged to 77.44, near the one-month high hit yesterday. The yen weakened 0.5 percent versus the dollar after a news report that Japanese government officials said they would take new steps against a strong yen as early as next week. The dollar was helped higher by an increase in US retail sales which rose 1.1 percent in September, the biggest gain in 7 months. EURJPY hit a 5-week high at 107.43 as euro was boosted across the board today on hopes of a successful G20 summit this weekend to tackle the debt crisis in Europe.

 

Gold rose steadily in New York trading, hitting a high of $1,683.18 as the US dollar dropped. The two have an inverse relationship. Dollar dropped optimism about European plans to contain the region’s debt crisis, which reduced the desire for the safe haven dollar.