Forex Market Review – Euro lifted after Monti survives confidence vote

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Euro was trading steady against the dollar for most of the European session and jumped by the US session overlap. EURUSD opened at 1.3024 and shot up to1.3083. Euro was lifted further after the Italian Prime Minister Mario Monti’s government won a confidence vote today over its package of anti-crisis austerity measures in the lower chamber of Parliament. EURGBP rose from 0.8387 to 0.8412.


The US dollar was weaker across the board due to the overall upbeat market sentiment so investors were willing to take on more risk and shifted away from the safe haven greenback.


Sterling gained against the dollar. GBPUSD opened the session at 1.5526 and after an early dip, bounced to a high of 1.5556.

The dollar extended losses and continued to edge down against the Swiss franc since Thursday. USDCHF fell from 0.9389 to 0.9350.

Against the Japanese yen, dollar declined from 77.89 yen to 77.76

USDCAD was mostly flat in the session after opening in Europe at 1.0316 but dollar got a boost to1.0344 after Canadian and US economic data.


Towards the end of the European session and US session overlap, the dollar trimmed losses and got a boost after US inflation data. The CPI report showed U.S. consumer prices were unchanged in November, mainly because of declining energy costs.  The so-called “core” CPI that excludes volatile food and energy costs rose to a seasonally adjusted 0.2 percent. The data supports the Federal Reserve view that inflation remains under control and is expected to cool further in the coming months. Lower inflation means Americans can buy more with the same amount of money, thereby improving living standards. And since consumer spending accounts for as much as 70 percent of U.S. economic growth, the economy could grow faster and adds jobs faster.