The Euro settled after its huge drop against the Dollar yesterday, but still remaining above the month’s low. Signal of a July rate hike by ECB Chairman Trichet was not enough to keep the Euro buoyed as this was already factored in by the markets, and so concerns reverted back to the Greek debt crisis. The future is uncertain, there may not be further rate hikes, and there has not been a viable solution to the Greek debt issue apart from mere stop-gap measures. EURUSD briefly rose to 1.4549 lifted by buying on dips, then fell to 1.4483.
Sterling extended losses against the Dollar into the Asian session to lose another 60 pips moving to lows of 1.6304 from 1.6363 open price. Some economic data will be coming out from the U.K. data, on manufacturing so there may be more movement later in the day. The Pound suffered huge losses yesterday after her Bank of England announcement interest rates were to remain unchanged at record lows.
The Dollar dropped against the Japanese Yen as profit-taking emerged after it reached a one-week high. USDJPY dropped from 80.45 to 80.01. There are expectations for the Yen to remain strong based on the fact that Japanese GDP is predicted to grow by September as the country recovers from the devastating earthquake that brought the economy to a slowdown.
The Australian Dollar does not have any reason to advance at the moment and remains near its lows after being battered by weak jobs data on Thursday. This cemented views that the central bank of Australia will not raise interest rates. After being lifted by dip-buying to a session high of 1.0651, AUDUSD then dropped to lows of 1.0585.
Spot gold was range bound all session taking on a consolidation mode. Markets are waiting for any new events that will cause a flight to safety in the safe haven investment. The current Greek crisis is keeping the precious metal buoyed but also investors are keeping an eye on the U.S. economic situation and what policy stance the Fed will take after its current $600 billion asset purchase program ends this month. XAU traded in Asia between $1,545.28 and $1,540.83.
Note: Daylight Saving Time is in effect