The Euro was on a continuous uptrend all day since the open of the Asian session, peaking at a new three-week high against the US Dollar. The Single Currency was boosted after reacting to several news reports this morning, mainly a WSJ report that Germany will most probably not resist giving Greece a second bailout loan and will stop pushing for restructuring. This eased market fears of a Greek default and dismissed concerns that the IMF will not give its next aid tranche to Greece. Additionally, comments from ECB Presidential candidate Mario Draghi supporting am interest rate hike soon lifted the Euro further, peaking at 1.4423. Gains were capped at that resistance level and opportunities for profit-taking ensued.
Sterling reached a one month high against a weaker US Dollar just before the European session began due to risk appetite picking up after Euro’s rise. GBPUSD peaked at 1.6544 but the highs were short-lived as Cable soon dipped in European trading when investors booked profits and took a cautious stance because the Pound is still fragile as markets are uncertain yet whether the BoE will raise interest rates soon. Expectations are pretty low at the moment. Sterling also lagged behind a stronger Euro today, with EURGBP rising to highs of 0.8744 from 0.8698 in European trading.
The US Dollar rebounded against the Swiss Franc, moving up from last Friday’s record low of 0.8462 to highs of 0.8544. The Swissy is usually in great demand during times of uncertainty, and as fears of the Greek crisis peaked last week, investors turned to the safer Franc. However, today risk appetite picked up as fears eased, turning investors to seek riskier assets, moving away from the Swiss franc. Meanwhile, the UBS Swiss Consumer Index released this morning showed a decline in April, also having a slight negative effect on the Swiss currency.
The Yen made losses against the greenback after it was battered from a Moody’s report that the rating agency is considering downgrading Japan’s credit outlook. This comes less than a week after other ratings agency Fitch came out with a similar threat last Friday downgrading its outlook from stable to negative. USDJPY soared from earlier session lows of 80.70 to highs of 81.76 in early European trading before settling around 81.63.