Forex Asia Review – Euro falls after Slovakia rejects vote to expand EFSF

Important: This page is part of archived content and may be outdated.

Forex Asia Review - Euro temporarily retreats from recent losses; Euro debt woes still persistEURUSD fell in reaction to the news that the Slovak parliament rejected a plan to expand the euro zone rescue fund. This hurt market sentiment but euro remained supported from a further fall as hopes are still high that Europe will finally tackle the debt crisis after Germany and France pledged to produce a plan by the next G20. Also Greece was prevented from defaulting after the troika approved the next aid trance in November. Slovakia will re-vote later this week and is likely to succeed with the main opposition party set to support the measure now that the government has resigned. EURUSD fell to an Asian session low of 1.3581 from the open of 1.3641.


GBPUSD opened in Asia at 1.5576 and drifted lower to 1.5541 taking direction from EURUSD. The disappointing result of the Slovak vote soured market sentiment and risk currencies like sterling suffered. EURGBP edged down to 0.8735 from the open of 0.8755.


AUDUSD opened in Asia at 0.9950 and slid down on falling equities and commodities as investors turned cautious after Slovakia rejected a vote to expand the euro zone rescue fund. Better than expected data on home loans helped the Australian dollar rebound from the session low of 0.9864 as activity in the housing market rose.


USDJPY traded an extremely tight range above 76.65 as the danger of yen-weakening intervention by Japanese authorities has seen the dollar/yen pair stuck in a narrow band. EURJPY fell to 104.19 from the 104.54 Asian open as Tokyo exporters took the opportunity to sell the euro against the yen after news of Slovakia rejecting the EFSF vote and delaying the expansion of the rescue fund.


USDCHF saw an opportunity to rise to 0.9982 from 0.9905 on a broadly stronger dollar after the Slovak vote. EURCHF opened Asia at 1.2389 and edged down to a session low of 1.2370.