The early European session saw the Euro pulling off from the earlier session’s 7 week low of 1.4047 that was reached in mid Asian session and climb up to a daily high of 1.4147. The latter half of the European session saw the single currency drop back down towards its previous session’s low as a better than expected year on year CPI, which came out at 1.8%, did little to influence the downward movement of the Euro seen at that time. The recent resurface of a struggling Eurozone, as well as the recent incident with regards to the IMF Chief Dominique Strauss-Khan’s accusing of attempted rape has seen further pressure weighing on the Euro in today’s sessions. Support for the EURUSD is seen at the 1.4000’s, a level which represents the March 28th low.
Against the Sterling, the Euro has been quite sluggish but has gradually gained some 10 pips to see it trade around the 0.8720’s for the most part of the European session. The pair is currently trading close to its 55 day moving average after having dropped below this indicator in mid last week. The recent drop over the past week of risky currencies has had a bigger impact on the Euro than the Sterling as worries of a Euro zone debt crisis and rumors that Greece may consider going back to the Greek drachma casted a major doubt on the single currency.
The British pound opened up the European session on a positive note, rising some 40 pips from an open of 1.6181 to reach a high of 1.6221 before dropping over 60 pips and come within a dozen pips of Friday’s one and a half month low of 1.6145. The recent decline in appetite for risky currencies continues as investors are still seeking comfort in low interest rate currencies such as the USD, further to the steep sell off experienced last week in commodity prices. The market is currently in anticipation of tomorrow’s UK CPI release, a figure which will give an indication on the current inflationary status of the British pound.
The Swiss Franc sharply gained against the Dollar in today’s session after trading steadily around the 0.8930’s in the Asian session. The gain for the Swizzy saw the USDCHF pair drop some 45+ pips in early session before leveling off to trade rather sluggishly around 0.8882. The decline sees the pair move closer to its 23.6% Fibonacci retracement level of its May 4th to May 13th gain, in which the USDCHF soared by over 4.5% after an appreciation of the USD against a basket of currencies.