Forex Europe Review – Euro fluctuated as markets await conclusion of EU Summit

Important: This page is part of archived content and may be outdated.

Forex News: Euro rises after Government survives late night confidence voteThe Euro reversed all gains against the Dollar after Eurogroup President Jean-Claude Juncker said that he couldn’t rule out a so-called selective default on Greek debt. Additionally European services and manufacturing growth data released this morning show the Euro zone weakened more than economists forecast to the slowest pace in almost two years, adding to signs the Euro-region recovery is losing momentum as the debt crisis persists. EURUSD fell to 1.4138 from an early high of 1.4293. However, towards the end of the session, Euro rebounded on speculation the European Financial Stability Facility may guarantee Greek bonds to make it easier for the ECB to accept a default on the debt. EURUSD then rose to 1.4323.

The Pound mirrored the Euro’s direction as risk aversion reigned market sentiment. Despite UK Retail sales bouncing back in June, much more than expected following a sharp decline in May, this did little to boost Sterling. Figures jumped to 0.7 percent from a previous minus 1.3 percent, beating a forecasted 0.5 percent growth. GBPUSD fell to 1.6123 from an early high of 1.6198. However, towards the end of the session, just like the Euro, the Pound rose on news from the EU summit regarding a Greek debt plan. GBPUSD then rose to 1.6249.


The Swiss Franc made losses against the Dollar most of the session as Swiss investor confidence dropped to the lowest in more than two years in July due to a worsening Euro zone debt crisis and an appreciating Franc clouded the growth outlook. The ZEW Swiss business confidence index fell to – 58.9 from – 24.3 in June. Meanwhile, Economy Minister Johann Schneider-Ammann said the Swiss currency’s strength is concerning and any short-term action would have to be taken by the SNB . This scared off investors from holding the Franc. USDCHF rose to a high of 0.8237 from a low of 0.8192. Towards the end of the session, the Franc jumped since the Dollar was weakened by poor jobs data in the U.S.


USDJPY fluctuated during the session, with Dollar initially gaining against Yen, then paring all losses in the second half of European trading. Dollar was bruised following US jobless claims data which were released at the end of the European session, showing more Americans filed for unemployment benefits in the week that ended July 16, jumping to from the previous 408,000 and more than the expected 409,000. This gives more evidence that the U.S. economy is still struggling. Meanwhile, the U.S. debt ceiling if not raised by August 2nd, the country will go bankrupt.