EURUSD was steady during the European session, mostly trading within the range it has been during the last six session. Highs were hit at 1.3366 after euro zone PPI data, but then a sharp drop followed down to 1.3299. Euro zone PPI came in stronger than expected, rising 0.6 percent on the month, with a substantial jump in energy prices. Rising inflationary pressure gave rise to speculation that the ECB will have to reconsider any interest rate cut. No cuts will be supportive of euro.
The dollar was weaker across the board, as measured against a basket of currencies. The ICE dollar index fell to a one-month low of 78.664, its lowest level since March 1.
GBPUSD stayed close to a 4-1/2 high, buoyed by strong UK construction PMI release of 56.7 that exceeded expectations of 53.4.Session highs were reached at 1.6039, but going into the U.S. trading session a decline to 1.5973 was touched, as cable was mainly tracking EURUSD movements in the late European session.
EURCHF tumbled to a two-month low of 1.2030, reaching close to the 1.2000 franc floor set by the Swiss National Bank in September last year. Any further fall is expected to be limited as traders are cautious of the possibility of a SNB intervention to curb franc strength.
USDJPY was flat during the European session, after retracing from a three-week low during the Asian session. The pair traded a 81.90-82.17 range. EURJPY reached highs of 109.62, moving off the Asian session low of 108.67.
AUDUSD extended its decline into the European session under pressure from a dovish Reserve Bank of Australia policy meeting today when the bank held interest rates on hold at 4.25 percent. The pair declined to 1.0351 from 1.0463