The euro dipped slightly in the Asian session after making its strongest gains in a month on Friday. EURUSD reached strong resistance levels and pulled back to a session low of 1.3826 from the Asian open of 1.3865 as profit-taking ensued. But euro remains supported on optimism that EU leaders will Europe will announce a comprehensive plan to resolve its sovereign debt crisis and recapitalize its banks at an important EU summit this coming weekend. The G20 meeting over this past weekend was somewhat successful in that the G20 leaders gave their backing to the Europe crisis plan but urged them to act within the next week to finalize the plan. If EU leaders disappoint at the October 23 summit, markets could very quickly turnaround.
GBPUSD opened in Asia at 1.5827 and traded in subdued with a slight downside to 1.5784 after failing to continue to advance past the 4-week high hit onFriday. Upbeat Asian stock markets helped support cable. With lack of domestic economic data in the UK, sterling will remain in consolidation. EURGBP opened at 0.8757 and traded sideways.
USDCHF reached key support levels and bounced off a three-week low of 0.8909 to 0.8940.
USDJPY opened in Asia at 77.07 and was propped up to 77.29 by Japanese importers buying up the dollar. Yen crosses saw little movement, with EURJPY opening at 106.87 and closing down at 106.77.
AUDUSD opened the session at 1.0327 and struggle to push above its four-week high reached on Friday but held on to most of last week’s big gains on optimism that Europe will soon come up with a concrete plan to tackle its debt crisis. The aussie dipped to 1.0283 against the greenback, as markets await further developments in the euro zone. Also the focus turns to the Reserve Bank of Australia’s October policy meeting due tomorrow, with some peculation a rate cut.
The New Zealand slid after a report showed the country’s services industry slowed in September. But losses were limited as Asian stocks extended a global rally from last week. NZDUSD opened at 0.8023 and touched lows of 0.8008.