Forex Market Review – EURCHF ends four-day rise after SNB maintains 1.20 CHF floor

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Swiss franc strengthened against the euro and dollar after the Swiss National Bank raised its growth forecast at its policy meeting today and kept the 1.20 CHF floor on the EURCHF. Investors took the opportunity for profit-taking, which halted a four-day rise of both dollar and euro against the Swiss currency. On Wednesday EURCHF climbed to the highest level since January 10, peaking at 1.2146 as investors were worried that the SNB might lift the 1.20 CHF floor on the pair.  The pair eased down to 1.2084 after the SNB meeting today. USDCHF fell to 0.9254 versus the pre-SNB high of 0.9333 yesterday.

EURUSD moved off a four-week low of 1.3003, and tracked higher during European session hours, touching highs of 1.3067. A positive U.S. jobs report helped maintain an upbeat market sentiment .

Sterling weakened against the euro after a news report that Fitch said the U.K. risks losing its triple-A rating.  Fitch changed its ratings outlook on Britain from stable to negative, due to a weak economic recovery, high debt levels and threats from the euro zone debt crisis. This helped lift the euro from a four-week low against the pound. EURGBP rose to 0.8348 versus 0.8293.

GBPUSD is still range bound and supported around 1.5633. Since the U.S. Federal Reserve meeting on Tuesday, the stronger dollar has pressured the pound. Dollar was boosted after the Fed appeared less likely to undertake further quantitative easing and failed to refer to expanding a bond-buying program during its policy statement on Tuesday.

Yen took back some losses against the dollar on profit taking after the sharp rally in USDJPY recently due to the Fed keeping back from more QE.  USDJPY rallied to eleven-month highs of 84.16 until early Asian trading hours today before easing down to 83.24 in Europe. EURJPY also fell from 109.62 to 108.71.

AUDUSD bounced off seven-week lows reached early this morning to rise to 1.0528. The aussie was hurt by disappointing data from China that showed foreign direct investment in China declined for a fourth straight month. Recent concerns about a slowdown in Chinese economy have affected the aussie, whose main export market is China.

The Canadian dollar turned back up against its U.S. counterpart after data showed U.S. jobless claims fell to a four-year low, based on the previous week’s claims.  This lifted the loonie and pushed USDCAD down to 0.9918 from an earlier high of 0.9947.