EURUSD rose to a seven-week high in European trading after being boosted by a successful EU Summit that succeeded in bringing together EU leaders and bankers to agree on expanding the EFSF and bank recapitalization, as well as 50 percent haircut on Greek debt. EURUSD first dipped to a session low of 1.3984 after some disappointing data on euro zone confidence data but this encouraged buying on the dip which lifted the pair higher to the seven-week high of 1.4063..
GBPUSD was trading a little choppy despite the euphoria in the markets resulting from the EU Summit. Cable rose steadily in the Asian session to come close to the seven-week high but faced key resistance levels and edged downside in early Europe trading, dipping to 1.5977. Better than expected UK realized sales data helped boost the pound back up to 1.6032. EURGBP gained 0.8 percent since the end of the EU Summit until the end of the European session, rising to a high of 0.8779.
USDCHF extended its decline to a six-week low of 0.8691. Despite lifted sentient after the EU summit, dollar remains week. Euro also fell against the Swiss franc, with EURCHF dipping to 1.2210.
USDJPY continues to be sold off into the European session to drop to a new record low of 75.66 today, with further downside expected. Investors selling off the US dollar on speculation that the Federal Reserve will opt for more monetary easing by next week. The dollar fall was accelerated today after poor US jobless claims data. Yen continues to gain strength despite Bank of Japan deciding today to include more monetary easing measures to mitigate the impact of the strong yen on Japan’s economy. Interest rates were kept unchanged at 0-0.1 percent. EURJPY rose sharply after the EU Summit and consolidated into a 106.10-106.55 range in the European session.
USDCAD has dropped 2.5 percent since yesterday, continuing the decline into the Europe session to touch a low of 0.9916.With risk appetite boosted after the EU Summit news, commodities were up, especially crude oil which is Canada’s major export. This helped strengthen the Canadian commodity-price sensitive currency.
AUDUSD soared to a two-month high in European trading, hitting 1.0659 as the positive news from the EU summit helped lift risk currencies along with commodities. Since beginning the ascent after the EU Summit ended, the aussie rose 2.6 percent against the US dollar.