Forex Trading News – Euro falls after German minister doubts crisis solution by EU summit

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EURUSD hit fresh one-month highs early in the session on upbeat sentiment ahead of the EU Brussels summit this weekend, with hopes of a crisis plan to be revealed. However, euro tumbled after German Finance Minister Wolfgang Schaeuble said that a definitive plan should not be expected this weekend. This triggered unwinding of positions and profit-taking ensued. EURUSD fell from the 4-week high of 1.3913 down to 1.3764.

 

GBPUSD took direction from the EURUSD pair and edged dipped 120 pips to 1.5730 as risk appetite was dampened after the German finance minister’s pessimistic comments. EURGBP rose to a 5-week peak 0.8795 during early European trading before retreating to 0.8735 on the back of the Schaeuble comments.

 

USDCHF was moving in reaction to EURUSD and change in risk sentiment pushed investors to buy the safe haven dollar up to 0.8982 francs from 0.8880 as euro weakened across the board on disappointment that a European crisis plan may not be finalized by this weekend as was pledged over the G20 summit last weekend.

 

EURJPY fell as euro was sold off across the board after investors were given a reality-check by Germany that the crisis plan cannot be done by the EU summit this weekend. EURJPY fell to 106.31 from an early session 5-week high of 107.67.

 

The Canadians dollar strengthened to its strongest level since September 21 against its US counterpart as the commodity price-sensitive loonie benefitted from a rise in risk appetite in early European session trading, optimistic after a successful G20 summit and hopeful for the European crisis to be resolved by this weekend. Crude oil rose to the highest level in a month which helped lift the oil producing country’s currency and pressured the greenback to fall to 1.0042. USDCAD soon rebounded to 1.0137 after risk appetite was shot down by the German minister’s negative comments that the debt plan will not be ready by this week.

 

The Australian dollar benefited from early risk-on environment to peak at a new four-week high as currencies perceived to be higher risk strengthened against the safe haven dollar. But was will all other risk assets, the aussie fell on the German minister’s comments that killed the dream of a European crisis solutions by this weekend, which was expected after what was promised in the G20 meeting. AUDUSD fell from the one-month high of 1.0370 down to 1.0261.