Forex Asia Review – Euro bounces to 5-month high against yen

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The euro advanced against the dollar and reached a five-month high versus the yen after news that the Greek parliament ratified the new EU/IMF bailout deal, which helped improve risk appetite in the markets. Also, the Greek finance ministry said on Tuesday Greece received its first tranche of 7.5 billion euros of aid under its second international bailout agreement. EURUSD bounced during Asian trading to as high as 1.3282 from 1.3223.

GBPUSD edged up with risk appetite from 1.5855 to 1.5893, though investors were cautious ahead of the key U.K. annual budget plan to be released by Chancellor of the Exchequer George Osborne later today. EURGBP opened in Asia at 0.8337 and rose to 0.8358, where it found strong resistance.

EURJPY advanced further to make a new five-month high of 111.14, after rising steadily from 110.70, as euro was lifted across the board following the good news from Greece.  USDJPY was capped below 83.73, as risk appetite kept the dollar subdued.  Disappointing economic data from Japan showed Japanese all industry activity declined more than expected in January due to a contraction in the tertiary sector, which pressured yen.

The Australian dollar was given a boost thanks to upbeat sentiment. AUDUSD pared losses and bounced from Tuesday low of 1.0456 to rise to 1.0525. The aussie suffered steep losses yesterday on fears about a hard economic landing in China and slowing growth.

A broadly weak dollar pushed USDCHF down to 0.9079 from 0.9115. USDCAD fell to 0.9882 from 0.9914.