Forex U.S. Review – Sterling gains across the board, Euro recovers against USD

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Forex News – Sterling trades steady after reaching 3 week lowThe Euro recovered in the U.S. session to gain against greenback, lifted by sovereign demand as well as a slight recovery in U.S. stock prices. (stock market movements causes the U.S. dollar to move in the other direction) Concerns about a stalling U.S. economic recovery and a ballooning budget deficit also weighed on the dollar. The rise in EURUSD may not be sustained for too long depending on the outcome of the Brussels Summit on June 23-24, when European leaders are due to finalize a new rescue package for Greece. The focus is whether Greece will eventually have to restructure its debt. EURUSD climbed to 1.4429 compared to the day low of 1.4320.

 

Sterling extended gains against the Euro, recording its strongest gain in over a week, boosted by Greek debt concerns and anticipation of inflation data on Tuesday. EURGBP reached as low as 0.8795. Against the Dollar, the Pound also gained and looked supported near-term, again helped by anticipation of Tuesday’s annual CPI, which is forecast to remain unchanged at 4.5 percent for May. A number above this would boost the Pound, but analysts said gains would not be sustained unless investors believe the Bank of England will respond with a rate hike. GBPUSD rose to highs of 1.6389 from lows of 1.6281.

 

The Swiss franc is the currency to be in right now, as its safe haven status puts it in demand as long as a deadlock over a deal is not reached soon by the EU on Greece. Adding to the negative sentiment, Standard & Poor’s ratings agency downgraded Greece’s long-term ratings by three notches to junk territory. The Euro hit a record low against the Swissie in European trading and the pair rebounded in the U.S. session as a corrective movement. Price swings may have been caused by low volume since many European markets were closed for a bank holiday this Monday.

 

The Canadian Dollar was stuck in range against the greenback today for lack of economic data on either side of the border. Lower commodity prices today prevented the Loonie from rising despite the broadly weaker U.S. Dollar. USDCAD traded between 0.9796 and 0.9753.

 

Gold declined to hit its lowest level in three weeks, as weakness in crude oil and commodities amid worries over economic growth and a European debt crisis prompted selling across the board. The drop should be temporary as it was due to profit-taking, and fundamentally, gold’s safe haven status will keep people investing in the precious metal during these uncertain times. Gold fell from highs of $1,532.33 to $1,510.83.

 

EURUSD USDJPY GBPUSD USDCHF USDCAD GOLD
OPEN

(12:00 GMT)

1.4363 80.32 1.6285 0.8368 0.9775 1525.83
DAY’S HIGH 1.4429 80.46 1.6389 0.8376 0.9796 1532.33
DAY’S LOW 1.4345 80.10 1.6281 0.8352 0.9753 1510.83
CLOSE

(21:00 GMT)

1.4414 80.19 1.6384 0.8371 0.9766 1516.63

Note: Daylight Savings Time in Effect for GMT