Forex U.S. Review – Canadian Dollar advances to 7-week high against USD

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Forex Market News - Euro continues to struggle as debt talks are seen in pesimistic focusThe Euro had a banner week, but it pulled back from its three week high against the Dollar to move down to 1.4435 in the US session, before rebounding again to close up at 1.4527. Since Monday, the Single Currency has been edging up to the build-up of the Greek austerity vote, and held firm after the two rounds of voting but gains remain capped as there is still some caution as there Greece isn’t totally out of the woods yet and there is still a chance something could go wrong. For now Euro is supported due to strong expectations that the European Central Bank will raise interest rates in the meeting next Thursday July 7. This rate differential with the Dollar’s is preventing Euro from falling because in contrast, the U.S. Fed will not likely raise interest rates anytime soon.

 

Sterling pulled back from its fifteen-month low against the Euro in the US session. In the previous session, EURGBP had hit 0.9082 after weak UK PMI data pressured the Pound. Cable had also been weighed down and then rebounded in US trading. GBPUSD rose to 1.6082 from 1.5992. The pair has been fluctuating in the past two days, overall appearing range-like. Sterling has been vulnerable recently due to a spate of weak domestic data and markets almost sure that the Bank of England will not raise interest rates at all this year.

 

 

The Swiss Franc has been weakening against most of its major counterparts following the good news of the outcome of the second round of voting in the Greek parliament yesterday. Approval of a law to impose austerity measures lifted market sentiment and consequently suppressed some investor demand for safe haven assets like the Swiss Franc. EURCHF surged to a five-week high to 1.2332 from 1.2254 and USDCHF rose to 0.8525 from 0.8458.

 

The Canadian Dollar extended gains against the greenback today despite the Canadian independence Day bank holiday. The loonie has been strengthening since Monday to reach a seven-week high today, boosted by positive economic data this week on GDP and inflation and expectations of a rate hike soon. Meanwhile, a rebound in oil prices in the US session and a weaker US Dollar has also helped lift the Canadian Dollar, which is a commodity-linked currency. USDCAD edged down to 0.9577 from the session high of 0.9650.

 

Gold fell to a six-week low today and has been unable to advance further since yesterday. After the Greek parliament voted in favour of legislation to implement austerity measures which gave optimism to markets and confidence that the debt ridden nation will avoid a debt default, investors turned away from the safe haven asset. An increased risk appetite pushed investors to other higher yielding investments. Spot gold reached a session low of $1,478.08 from a high of $1,493.73.

 

EURUSD GBPUSD USDCHF USDCAD GOLD
OPEN

(12:00 GMT)

1.4486 1.6017 0.8458 0.9635 1489.23
DAY’S HIGH 1.4533 1.6082 0.8525 0.9650 1493.73
DAY’S LOW 1.4435 1.5992 0.8458 0.9577 1478.08
CLOSE

(21:00 GMT)

1.4527 1.6069 0.8487 0.9582 1487.63

Note: Daylight Savings Time in Effect for GMT