EURUSD opened in Asia at 1.4407 to continue the downtrend after the disappointing outcome of the Merkel – Sarkozy meeting and a rejection of the issuance of euro zone bonds. But Asian players buying on dip taking advantage of the low prices and short covering helped lift euro back up to 1.4409. Anticipation of the Swiss officials meeting later today also helped boost euro as there are rumours that the SNB will be more aggressive and set a target as high as 1.20 for a Swiss franc peg to the euro.
GBPUSD opened in Asia at 1.6452. After a stellar performance most of yesterday following stronger than expected CPI data, cable drifted lower on the backfoot of EURUSD after a disappointing outcome of the Franco-German summit. GBPUSD fell to 1.6411 before bouncing slightly to 1.6440 also alongside EURUSD. Meanwhile EURGBP opened at 0.8754 and fluctuated down to lows of 0.8738 before rebounding above the opening price to a high of 0.8764.
USDJPY remains trading in a limited range due to light volumes and the Japan Obon holidays ,though with a slight downside in the Asian session, hovering above the 76.65 price zone and limited below the 76.78 level, as risk sentiment was slightly off after the Franco-German summit disappointment. But with no other major fundamental macroeconomic news to cause significant movements, the pair traded steadily. Investors are still spooked about letting yen gain too much strength after threats from Japan finance minister Noda that he will intervene in the markets.
The Australian dollar initially fell against the U.S. dollar but soon recovered all of its losses rising back up past opening prices after dipping 50 pips to 1.0431 to close at 1.0491. The Aussie gained strength after positive wage data. The index for all employee jobs in Australia rose 0.9%, in trend terms.