The Euro extended losses in the US session against the Dollar after a brief retracement. EURUSD eased off its month highs today after a German Ministry of Finance official mentioned that it was still not certain that a second Greek bailout deal will go through. Meanwhile, Eurogroup Chairman, Jean-Claude Juncker mentioned today that the Euro was overvalued.EURUSD dropped to a session low of 1.4556. Losses should be contained as the Single Currency is still supported by the expectations of a rate hike by the European Central Bank by July. All focus is now on the ECB meeting on Thursday to look for any hints of a change in monetary policy. If interest rates rise, the Euro will lift higher than the Dollar since the U.S. is not likely to raise interest rates anytime soon.
Sterling continued falling against the Dollar in the US session, reaching a session low at 1.6340. The Pound was weakened after the International monetary fund mentioned in its annual report to the British government that the rise in inflation in recent months was unexpected, suggesting that interest rates should remain unchanged for now. Against the Euro, Sterling had reached a new month low in US trading, with EURGBP peaking at 0.8937. The Pound soon regained losses after the Euro dipped on concerns about the Greek bailout plan after a German official mentioned that it might not be certain yet. EURGBP dipped to 0.8907.
The Swiss franc eased off the all time highs against the U.S. Dollar, to pull back and allow the greenback to make some gains. Last week USDCHF hit record lows after disappointing U.S. jobs data on Friday pushed cautious investors into the safe-haven currency. The pair retraced as investors started booking profits today. USDCHF hit highs of 0.8385 and lows of 0.8354.
The Canadian Dollar initially gained against the US Dollar, only to pare all gains by the later half of the US session. Declining oil prices and lingering concerns about the economic situation of Canada’s main trading partner, the United States, prevented the Loonie from gaining traction. The U.S. absorbs around three-quarters of all Canadian oil exports. The price of U.S. crude oil was down more than 1 percent on worries of a U.S. slowdown. Adding to concerns was the release today of Canadian building permits data which showed a drop to 21.1 percent in April. The market had forecast a 6.0 percent decline. Prior month (revised) figures showed an increase to 16.8 percent. USDCAD traded between 0.9816 and 0.9776.
Gold rose to its highest price in more than a month by mid-US session trading, peaking at $1,553.33. Concerns that one of the world’s largest economies may be stuck in a soft patch prompted investors to turn to the safe haven precious metal to hedge against risk.
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