The Euro rebounded off its two-month low of $1.3968 recorded yesterday, to climb as much as 150 pips above that trough, hitting 1.4115 against the US Dollar in intra-day trading. What helped lift the Single Currency this morning were the positive economic data released from Germany. Gross Domestic Product statistics from the strongest economy in the European Union met expectations to record a 1.5 percent growth. Meanwhile, the German Ifo Business Climate index showed that confidence in economic growth has not declined. In the first half of the trading session, EURUSD dipped briefly by almost 70 pips from an earlier high of 1.4068 after news that the Greek opposition leader rejected the government’s austerity plan. Some investors took the opportunity to buy on the dip and helped buoy the Euro, further pushed by the upbeat German data.
The Sterling was bruised after Moody’s announced this morning that it had put fourteen UK banks “on review for possible downgrade”. After opening the European session up at 1.6112, GBPUSD almost immediately spiked down 47 pips to a low of 1.6067 but then quickly recovered to move up to a high of 1.6177 before the release of worse than expected UK public finance sector data for April by intra-day. The figures showed that the UK deficit widened more than predicted. This caused GBPUSD to dip from its short-lived highs to drop to 1.6137. Meanwhile the Pound rallied against the Euro, initially making gains after the news of the Greek opposition leader rejecting new austerity measures, then losing as EURGBP climbed to 0.8750 from the open of 0.8729. EURGBP fell to close at 0.8721.
The Swiss Franc was off its highs recorded yesterday against the Euro. The EURCHF pair has reached a five-month low yesterday due to a weaker Euro based on the debt crisis. However, as some investors believed the Euro to be oversold, especially sovereign buyers from Asia, lifted the EURCHF just before the open of the European session, only to dip by then 1.2446 down to 1.2391. The US Dollar has been trading at higher levels against the Swissy since all time lows on May 5 when it hit 0.8551. In the past two weeks USDCHF has remained above 0.8760 but has mostly been range bound. After rising in Asian trading, the pair dropped in the European session from 0.8846 to touch lows of 0.8788.
The Japanese Yen made losses against the Euro since the beginning of the trading week, losing almost 60 pips in the European session as it was pushed down by boosted Euro today (from positive German data), with the EURJPY moving up from 115.12 to 115.73. Meanwhile, the Yen also made losses in the session against the US Dollar as it was outbid by a stronger greenback. USD JPY opened at 81.82 and climbed as high as 82.09.