Euro outperformed the dollar overall in the session, despite a brief spike down after disappointing euro zone industrial production data which caused EURUSD to dip to 1.4147 from the open of 1.4196. An introduction of a ban on short-selling of financial shares by some euro zone countries managed to calm jittery nerves after a tense trading week. Additionally, better than expected U.S. retail sales data lifted confidence and the euro to 1.4284.
GBPUSD opened Europe at 1.6196 and took direction from Europe due to lack of UK data, and fell down to 1.6164 after weak euro zone industrial production data. Europe is the U.K.’s major export area. As risk sentiment rose, so did Sterling, peaking at 1.6295 against the dollar. EURGBP fluctuated from an early high 0.8775 down to 0.8738 after weak EZ data, then jumping to 0.8772.
The Swiss franc weakened even more today, moving even further away from record highs against the dollar and euro. Downward pressure on the franc is partly due to rebounding stock markets, Swiss National Bank proposals of of negative interest rates on Swiss deposits and increasing speculation of a peg to the euro. All these measures are in order to curb franc strength since it could have a detrimental effect on Swiss exports. USDCHF opened at 0.7588 and rose to 0.7765. EURCHF peaked at 1.1045 from the 1.0774 open.
USDJPY opened Europe at 76.79 and rallied throughout the session, slowly edging down to a low of 76.49 from where it sharply rebounded to 76.70 after dollar was boosted by better than expected U.S. retail sales data. Yen has been very strong recently due to concerns of a global economic slowdown and also as a result of a high Chinese Yuan affecting Asian currencies used as a proxy for the Chinese currency. Despite Bank of Japan warning of market intervention to curb yen strength, the Japanese currency is still perceived as a safe haven asset.