Forex European Review – EURUSD highest level in a week, USD lower on weak GDP data

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The Euro has been trading at the highest level since last Friday against the US Dollar in the European session, boosted by a Financial Times report that Asian investors, and particularly China, are willing to buy Portuguese bail out bonds, thereby aiding in the Eurozone debt crisis. Meanwhile, European Central Bank Chief, Jean-Claude Trichet mentioned in his speech today that the ECB is monitoring inflation and will do whatever is necessary. Some investors believe that interest rates will be raised very soon in the Eurozone, which gives them confidence in the Euro. A bounce in commodity prices in the prior session also contributed to lifting the Single Currency. After gaining over 100 pips in Asian trading peaking at 1.4188, EURUSD remained on those high levels through European trading, then given another boost before close after weak US economic data on GDP and unemployment brought down USD, thereby pushing up EURUSD further to 1.4202.

Sterling is enjoying two week highs, remaining above the 1.6264 support level, which was the Asian session base, and hitting highs of 1.6362 passing the Asian session high. The Pound followed on the back of the Euro today, reacting to Financial Times report of the Asian investors interest in purchasing Eurozone debt. EURGBP moved off its two –month lows of yesterday, gaining in the Asian session to peak at 0.8710 by early European trading, making 70 pips. The pair soon retraced as investors digest the news of the Financial Times report, and may give an opportunity to more investors to buy on dips.

The Swiss Franc consolidated gains made against the US Dollar in early European trading, then extended those gains in after trading when USDCHF dropped over 60 pips from the morning high of 0.8717 down to 0.8655. EURCHF was range bound in European trading after being lifted in the prior session from an all time low. Before closing the European session, EURCHF then dropped over 60 pips down to 1.2291 from a day high of 1.2358.

The Japanese Yen hasn’t been the focus of many investors lately since the Euro has taken the spotlight these days, especially since USDJPY has mainly been range bound until this afternoon when the pair dropped over 80 pips after US economic data was released showing weak GDP and high jobless claims. Morning highs were 82.01 and lows were 81.14. EURJPY hit highs of 116.37 and lows of 115.20.