The Euro climbed to a one-month high against the U.S. Dollar, boosted partly by better-than-expected German factory data as well as generally being supported by a more positive mood in the markets after European Central Bank President, Jean-Claude Trichet mentioned that he believed a restructuring of Greece’s public debt is inappropriate as long as the government follows through on reforms. Meanwhile, there is still continued expectation of a rate hike in July. EURUSD hit 1.4695 from the open level of 1.4665. Just before the end of the session, U.S. Fed Chairman Ben Bernanke gave a pessimistic outlook on the U.S. economy, weakening the Dollar.
Sterling climbed to a seven day high against the greenback in the earlier session and then remained in a range in the U.S. session, hovering around the prior highs, hitting 1.6465. GBPUSD was mainly buoyed by Dollar weakness, which was weakened earlier today after a Chinese FX official warned of risks in holding excessive amounts of U.S. Dollar assets. Before the end of the session, Fed Chief Bernanke gave a pessimistic speech which further weakened the Dollar. Meanwhile, EURGBP traded in a range in the New York session after having peaked to a month high in the previous European trading session. The Pound was weakened due to weak UK retail sales data released today, which added to the expectation that the BoE will maintain interest rates unchanged for the foreseeable future.
The Swiss Franc eased off its record high against the Dollar that was reached in the earlier session when the greenback was affected by negative comments from a Chinese foreign exchange regulator who warned that China should guard against risks from excessive holdings of dollar-denominated assets. USDCHF rebounded in the U.S. session to 0.8389 from the open of 0.8341. Then the Dollar weakened again just before the end of the session after Fed Chairman Bernanke’s negative views on growth in the U.S. economy.
The Canadian Dollar extended gains against the greenback in the U.S. session. It was helped by a rise in commodity prices, and since the Loonie is a commodity-linked currency, any change in commodity prices, especially oil, will affect the currency. USDCAD dropped to a new month low at 0.9730. The pair then rebounded after Fed Chairman Bernanke’s speech in which he was pessimistic about growth in the U.S. economy. This will affect the Loonie since the U.S. is a major trading partner to Canada.
Gold slipped in U.S trading, dropping from the open highs of $1,549.28 down to lows of $,1536.03 as some investors booked profits after a new month high was hit yesterday. The precious metal soon pulled-back. After Fed Chairman Bernanke’s speech, gold picked up again since his outlook on economic recovery in the U.S. didn’t sound very positive.
Note: Daylight Savings Time in Effect, add 1 hour to GMT