The Euro strengthened against the Dollar as debt yields of some peripheral Euro zone countries retreated, and sovereign buying on dips lifted the Single Currency by some 150 pips to 1.4216 from the open of 1.4077. However, the gains may be short-lived if EU leaders fail to reach a lasting agreement on a second Greek bailout and measures to stop the debt crisis spreading to other EU economies.
The Pound mirrored the Euro’s movements, rising to 1.6159 against the Dollar from a low of 1.6056. Lack of UK fundamentals and economic data turned investors focus to debt concerns on both sides of the Atlantic. Against the Euro, Sterling traded lower, with EURGBP rising to 0.8807 from the open of 0.876, lifted by sovereign buyers.
The Swiss Franc made losses against the Dollar early in the European session, as USDCHF rose to 0.8231 from the open of 0.8182. The Franc also retreated from yesterday’s record high against the Euro, with risk aversion taking a breather across the board today. EURCHF climbed to 1.1656 from 1.1519.
The Yen gained against the Dollar as concerns grew over the US debt. USDJPY fell to78.86 from the open of 79.01.Late in the session, the Dollar gained after the release of U.S. housing starts which rose more than expected in June. U.S. housing starts touched a six-month high and permits for future construction unexpectedly increased.
Note: Daylight Saving Time in effect for GMT