Forex Asia Review – Euro jumps after Spain given EU aid for bank recapitalization

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Euro started the new trading week higher after good news over the weekend helped boost risk appetite. Spain was able to secure financial assistance from the EU in order to recapitalize the country’s troubled banks. This eased market fears of a bank-run if the crisis spiralled out of control. Other news from China also helped market sentiment. Economic data was mixed, some on the weak side but trade numbers were better than expected.


Gains in the euro are expected to remain limited despite the favourable news regarding Spain, as the euro zone crisis is far from over and Greek elections are coming up on Sunday, June 17.


EURUSD opened in Asia with a gap higher from Friday’s close, beginning at 1.2638 versus 1.2515. The pair hit a two week high of 1.2667.


GBPUSD opened 0.2 percent up from the New York close last week to begin the Asia session at 1.5505 and climbed to 1.5558.


USDCHF was pushed down as the safe haven dollar weakened across the board against risk currencies, with the pair falling 1 percent since the Friday close, to reach a low of 0.9475 in Monday’s Asian session.


USDJPY was buoyed as safe haven demand for yen was reduced. The pair opened up at 79.59  and edged higher to 79.71


AUDUSD saw a bump up from Friday’s close of  0.9911 to open Monday at 0.9983, reaching an early peak of 1.0006. Trading in the aussie was slow with Australian markets closed for a public holiday today.