Forex Market Review – Euro dips on S&P comments; USDJPY extends losses after US data

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Euro dipped against the dollar going in to the North American trading session as the currency was weighed down following comments by the head of Standard and Poor’s saying Greece might need to restructure again. Also today’s euro zone confidence data was disappointing. EURUSD opened in Europe at 1.3314, rising early to 1.3344 supported by strong German employment numbers, before slipping to 1.3251.


The market focus will be on the Ecofin meeting tomorrow as euro zone CPI data. The euro zone finance ministers are expected to make progress on discussion to expand the EFSF/ ESM. Euro is expected to remain little changed until then.


The dollar was unable to gain ground after U.S. disappointing jobless claims numbers, which rose higher than expected. Meanwhile, final fourth quarter GDP numbers did not provide any surprises, and remained the same as previous at 3.0 percent.


The U.S. data caused dollar to extend losses against the yen as safe haven flows in to the Japanese currency also increased amid risk aversion. USDJPY fell to 81.90 early into the New York trading session, forming a three-week low, compared to the European session high of 82.67. EURJPY slid to 108.75 versus a 110.14 European session high.


The  Australian dollar weakened further on speculation over a potentially dovish stance from RBA driven by fiscal headwinds, as well as falling commodities weighing down the aussie. AUDUSD fell to a low of 1.0322 from 1.0395 heading to a two-week low.