Forex Review – EURUSD hovers near 2-year lows, EURCHF jumps on possible SNB deposit tax

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Euro fell back towards 22-month lows against the dollar during the U.S. trading session trimming earlier gains. EURUSD touched a low of 1.5646, but stalled and found it hard to break below that level. The single currency remains under pressure after disappointing German Ifo and manufacturing data released earlier in the day. Also EU leaders at a Summit on Wednesday failed to make key decisions on tackling the euro zone debt crisis as fears deepen over Greece’s possible exit from the euro zone.

 

Sterling suffered sharp losses toady after UK first quarter GDP was revised lower, confirming the British economy is in a recession. GBPUSD touched a two-month low of 1.5637 during London trading and after a retracement, fell back down in the New York session, touching as low as 1.5646.

 

The Swiss franc weakened to its lowest level in two months against the euro amid speculation the Swiss National Bank may take action to discourage investment in the swissie through taxing deposits, which means effectively imposing negative interest rates. EURCHF briefly spiked to 1.2074 before trading down to 1.2010.

 

The dollar rose against the Swiss franc to the highest level since February, with USDCHF hitting 0.9594 in European trading, and came close to that level again late New York trading hours.

 

USDJPY rose to a high of 79.62, moving off an earlier low of  79.33. Bank of Japan governor Masaaki Shirakawa said today that the BOJ was committed to maintaining its ultra-loose monetary policy. EURJPY hovered near three-month lows of 99.34 hit earlier in the day.