Forex Market Review – Dollar down on Fed easing speculation; euro jumps on G20 liquidity aid

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Euro rose higher against the dollar going into the US trading session after being stable for the past two days on some optimism ahead of the Greek elections after news yesterday that the EU would give the Greek government some leeway in the bailout terms.  Late in the US session EURUSD jumped to 1.2633 after reports that the G20 central banks are prepared for coordinated action to provide liquidity if needed after the Greek election on Sunday. The G20 summit takes place in Mexico on Monday and Tuesday.


Sterling also rose higher on risk appetite after the G20 news late in New York trading, rising to 1.5561 after having dropped to a low of 1.5515.


Dollar fell against riskier currencies as safe haven demand fell and risk aversion faded after the G20 news. USDCHF dropped to 0.9506, down 0.6 percent during  the U.S. session.


The Canadian dollar and Australian dollar rose against the greenback as stocks and commodities advanced amid better sentiment and demand for higher-yielding assets.  USDCAD fell to 1.0230, down 0.6 percent on the day. AUDUSD hit parity at 1.002, gaining 0.7 percent from the day low.


USDJPY   dipped to 79.14 after US after initial jobless claims rose last week and inflation declined in May. Claims for jobless benefits unexpectedly increase by 6,000 to 386,000 in the week ended June 9 from a revised 380,000 the prior week. This raises speculation that the Fed will increase quantitative easing at the next meeting on June 20-21.