Forex Review – Hopes for Greek PSI buoy euro; US jobs data helps support sentiment

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The euro remained steady against the dollar today, mostly trading within a range and moving on the upside during the U.S. session, rising from 1.3095 to a high of 1.3163. With the Greek PSI deadline looming and a day left to complete the transaction, most investors seem to be positioning for PSI to happen and are no longer selling off the euro.

The PSI participation rate has been increasing throughout the day. The Greek government is looking for at least a 75 percent participation rate,  which is key to enabling Greece to secure a second bailout worth 130 billion euros and meet a bond repayment due on March 20. There were concerns earlier today that if fewer than 75 percent of creditors accept the offer, the deal could be off, potentially forcing Greece to default and push the euro zone into a deeper crisis.

The increase in hopes for the PSI helped lift the euro against yen, pushing up EURJPY to a high of 106.78 from a session low of 105.78.

Sterling took direction from the euro-dollar and also rose against the dollar, with GBPUSD climbing to 1.5753 from a low of 1.5696.

Growth linked currencies like the aussie and Canadian dollar were given a lift after strong U.S. labour market data whetted investor appetite for the riskier currencies, which had taken a beating earlier in the week.   The U.S. ADP National Employment Report showed the country’s private sector added 216,000 jobs last month, higher than economists’ expectations.

AUDUSD moved off lows and  rose to 1.0592 from  a session low of 1.0532. USDCAD fell to 0.9972 from 1.0023.

The ICE dollar index, which measures the greenback against a basket of six currencies, fell to 79.692, from 79.843 late Tuesday.

Gold ended higher, snapping a three-day losing streak, as signs of improvement surrounding the Greek debt deal and a weaker dollar gave gold a boost. The tow assets usually have an inverse relationship. Gold touched a high of  $1,687.66 from a New York session low of $1,672.28.