Forex Asia Review – Euro rebounds ahead of ECB meeting

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Forex News – USD pulls off from 3 year low as Euro closes in on recent highsThe Euro pared losses against the Dollar and edged up some 50 pips to a high of 1.4631 in Asian trading. The Single Currency was lifted by expectations of a hawkish tone from ECB Chief Jean-Claude Trichet after the ECB policy meeting later in the day at which the Bank is expected to lay the groundwork for a rate hike as early as July.


Sterling has been like a yo-yo in the past week. GBPUSD climbed from the Tuesday low of 1.6347 to an Asian session high of 1.6414. The pair is expected to steady at these levels ahead of a busy day scheduled with UK trade data coming out as well as the much awaited Bank of England policy decisions. Expectations are for rates to remain unchanged given the current weak economic situations of the UK.


The Japanese Yen was weakened against the Dollar after revised data indicated Japan’s economy shrank 0.9 percent in the first quarter. USDJPY rose from 79.86 to 80.28. However, with the Dollar being weak, many economists expect Yen to rise as GDP is predicted to resume expanding by September since the current slowdown is blamed on the supply chain problems following the natural disaster in Japan back in March.


The Australian Dollar plunged against the U.S. Dollar after weaker-than-expected jobs data, casting doubt on how soon the Australian Central Bank will raise interest rates. Employment rose only 7,800 in May, well below forecasts of a 25,000 increase. AUDUSD dropped some 100 pips from highs of 1.0661 to 1.0562. The Aussie was already recently battered by negative news from the Wall Street Journal report on the Aussie Dollar running out of fuel.


Spot gold was range bound all session as markets took a wait-and-see mode, wanting to get a more clear sense of direction for major global economies, especially the future of U.S. growth as well as the European debt crisis. The ECB will be meeting today and more importantly, all focus will be on the U.S. Federal Open Market Committee meeting on June 21 and 22 when the future of the Fed monetary policy will be revealed. Spot gold closed the Asian session at $1,535.38.



(22:00 GMT)

1.4582 79.86 1.6401 1.0622 116.47 1537.38
DAY’S HIGH 1.4631 80.28 1.6414 1.0662 117.45 1538.58
DAY’S LOW 1.4572 79.82 1.6388 1.0562 116.44 1534.18

(06:00 GMT)

1.4624 80.04 1.6409 1.0590 117.06 1535.38

Note: Daylight Saving Time is in effect, add one hour to GMT