The Euro rose against the Dollar on optimism that EU leaders may reach an agreement to deal with Greece’s debt problems. French ministers said today that EU leaders are not so divided as the media has been reporting. Any further advancement in the Euro will be capped since investors though still take a cautious stance since uncertainty still exists and the risks of contagion prevail. Additionally, the U.S. debt limit problem still has to be dealt with. EURUSD rose to 1.4238 from the open of 1.4141.
Sterling began the session by falling against the Dollar to a session low of 1.6067 but pared losses following less dovish Bank of England policy meeting minutes. The votes on interest rates came out as expected. Committee members voted 7-2 to keep rates at 0.5 percent, as they did in June. The market was short prior to the release of the minutes in anticipation of more discussion of quantitative easing but the minutes did not mention anything so the Pound jumped higher. GBPUSD rose to a high of 1.6149.
The Swiss franc traded in a range most of the session against the Euro. Investors turned away from the traditionally safe haven Swiss currency back to the Euro today as they are slightly more confident about moving into riskier assets on hopes that some kind of deal will be reached at the EU leaders summit tomorrow for the Greek debt issue. EURCHF traded between 1.1686 and 1.1642. Meanwhile the Swissie gained against the Dollar as investors stayed away from buying the Dollar due to the uncertainty of the U.S. was making progress on debt talks. USDCHF edged down from the open of 0.8243 to a low of 0.8196.
The Yen strengthened against the Dollar as profit taking ensued following the greenback’s rise in the prior session due to Obama’s optimism in reaching an agreement on reducing U.S. debt. USDJPY fell from the session open of 79.06 down to 78.70. EURJPY reached a low of 111.65 early in the session but Euro soon advanced against the Yen to reach a high of 112.32 as some optimism is growing ahead of the EU leaders summit tomorrow.