Forex Europe Review – Yen gains across the board amid risk aversion

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EURUSD continued to be sold off in the European session and fell to a new eight month low as dollar strength remained firm post-Fed meeting. Eurozone data only made matters worse. PMI manufacturing data for the eurozone fell in August, as well as for France and Germany also fell, which added to the gloomy outlook for Europe. EURUSD opened the session at 1.3560 and tumbled down to 1.3396.


Sterling weakened against the dollar and the yen. Cable fell to a near nine-month low as safe haven and liquid dollar continued to strengthen on risk aversion following the Federal Reserve statement that there is downside risk to the economy. GBPUSD fell from a high of 1.5497 and plumbed down to 1.5350 also exacerbated by EURUSD decline. GBPJPY fell to a record low today touching 117.07 after falling from the 118.64 open. The British pound has been falling since Wednesday following a dovish Bank of England minutes and the probability of quantitative easing (which dilutes sterling value)


The Swiss franc continued to weaken against the broadly stronger dollar. The franc was further hurt after a survey showed investors are pessimistic about the prospects of the Swiss economy. The ZEW investor sentiment index sank to -75.7 points in September, its weakest reading since December 2008.USDCHF opened at 0.9036 and hit a five month high of 0.9181. The Swissie also was weaker against the euro on the possibility that the Swiss National Bank will raise the currency ceiling to 1.25 franc against the euro from the current 1.20 level. EURCHF hit its highest level since July, peaking at 1.2343 from the open of 1.2256.


Yen was strong across the board today due to its safe haven status.EURJPY hit a fresh ten year low in the London session, extending its decline from the open level of 104.07 to tumble to 102.20, the lowest since June 200, as the perceived safe haven Japanese yen was in demand amid risk aversion following the Fed statement. USDJPY fell close its record low, touching 76.30 today. Sterling hit a record low against yen, while AUDJPY fell to its lowest since March.