Forex USA Review – Euro recovers losses after Slovakia votes yes to EFSF

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Forex News: Euro rises against Dollar in early Asian sessionEURUSD extended losses early into the US session as waning risk appetite weighed on the euro all day and the ECB dampened sentiment by saying involvement of private banks in bailouts would risk financial stability. News later in the session that the Slovakian parliament ratified a plan to enhance the euro zone’s EFSF rescue fund helped EURUSD bounce from a low of 1.3684 to 1.3798. Slovakia was the last member of the 17-nation euro zone to vote on the EFSF. It had initially rejected the vote on Tuesday but finally passed the vote in a second round of voting today.

 

GBPUSD was under pressure from weakness in the euro, which was the main mover of sterling today. Fragility of the UK economy and monetary easing by the Bank of England also weighed on the pound despite the UK trade balance data coming out better than expected today. GBPUSD fell to a session low of 1.5665 then bounced up to 1.5783 following a rise in EURUSD.

 

The Canadian dollar weakened against the U.S. dollar as commodity prices softened and crude oil slid for a third day in New York trading. Canada is a major oil exporter so this weighed down on the loonie. As with all other risk currencies, the Canadian currency changed direction half way into the session and pared all losses to gain strength. Meanwhile trade data out of Canada came in slightly better than expected, with imports growing at a faster rate than exports. USDCAD fell to 1.0179 by the end of the session from a high of 1.0271.

 

EURJPY bounced off an early low of 105.12 to climb to 106.07 after news that Slovakia finally ratified changes to the EFSF and overall market sentiment improved after a pretty dampened risk-off day. USDJPY consolidated into a range after a big drop in the previous session, and hovered around 76.80.