Forex Market Review – Euro eases off two-week high against dollar; Greek debt talks in focus

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Euro eased off a two-week high against the US dollar as investors took the opportunity to book profits after such a strong rally in the past three days.   EURUSD has gained 2 percent this week, propelled by strong bond auctions in Spain and France on Thursday which boosted risk appetite and put the single currency on track for the biggest weekly gain in three months.


EURUSD hit 1.2985 early in the European session before sliding to 1.2887. Despite the decline, euro is expected to remain supported by the Greek debt talks which are still underway and investors are eagerly awaiting the outcome. So far, the likelihood of an agreement between Greece and the private sector securing a deal is quite high, as confirmed by Greek finance minister Evangelos Venizelos after a meeting on Thursday.


Against the yen, the euro was down from a two-week high of 100.33 to 99.45, but still well off an an 11-year low of 97.04 yen on January 16.


GBPUSD reached a new two week high of 1.5500 right after the London session opened but soon tracked the decline of the euro and began to decline. Sterling dipped further after UK retail sales data. Despite numbers rising in line with expectations, many had hoped for stronger sales figures. Cable dipped to a session low of 1.545 before bouncing to 1.5486.


The Canadian dollar weakened against its US counterpart after annual inflation rate fell in December CPI  dropped to 2.3 percent from 2.9 percent in November increases the already built-up expectations for the potential of a rate cut in Canada. USDCAD which was trading near a six-week low early in the European session at 1.0120, touched as high as 1.0160 in reaction to the CPI data. Also, lower oil prices are weighing down the commodity price-sensitive loonie. (Canada exports oil) WTI oil is currently trading around $99.70 per barrel, 0.7 percent lower on the day.