Forex Asia Review – Euro rises after Merkel-Sarkozy pledge to recapitalize European banks

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EURUSD opened the new trading week in Asia at 1.3389 and steadily climbed in reaction to news that said a meeting on Sunday with German Chancellor Angela Merkel and French President Nicolas Sarkozy resulted in a pledge between the two countries to deliver a plan to recapitalize European banks and address the Greek debt crisis by the next G20 summit in November. This helped lift risk sentiment and EURUSD rose to a session high of 1.3459.


GBPUSD opened in Asia at 1.5557 and rallied to a high of 1.5617 tracking gains in the euro/dollar pair on renewed risk appetite and optimism of a solution to the European debt crisis following Merkel/Sarkozy comments. This helped sterling gain losses made on Friday when cable dipped after Italy and Spain was downgraded by Fitch ratings agency.


AUDUSD opened in Asia at 0.9750 to regain losses from Friday’s US session and move up to 0.9845. Risk sentiment was lifted after a Franco-German meeting over the weekend, with a pledge to do what is necessary to shore up European banks, tackle the Greek crisis and help growth in Europe.


USDJPY was trading flat in Asia today because of the Japanese bank holiday as well as the US holiday so with both markets closed, trading in the pair was thin as anticipated. However, EURJPY rallied to a high of 103.42 from the Asian open of 102.81, lifted by positive news from Europe Sarkozy and Merkel to recapitalize the banks and contain the sovereign debt crisis.