EURUSD dipped slightly in the Asian trading session but soon regained losses to move higher towards the European session open as it appeared likely that the Greek talks would continue today. There are hopes that the talks are likely headed toward a conclusion ahead of the Eurogroup European finance ministers meeting in Brussels later in the day.
EURUSD opened in Asia at 1.3258 to dip to 1.3214 then bounced to 1.3311 before the open of the European session, reaching a new two-month high.
The main focus today will be on the Greek debt talks again, as well as the Euro group meeting and the European Central Bank policy meeting.
GBPUSD opened in Asia at 1.5816 after a sharp fall in US session on speculation that the Bank of England policy meeting later today will result in more quantitative easing. Cable bounced from 1.5791 to 1.5846 tracking the EURUSD bounce.
The Australian dollar weakened briefly after China’s CPI report showed higher-than-expected inflation. This would likely cause the Chinese government to refrain from more stimulus and monetary policy easing, which in turn could be negative for Australia which is a major trading partner of China. AUDUSD touched a low of 1.0739 from 1.0796, before rebounding to 1.0822 following the bounce in sentiment across the market.
The dollar continued to rise against the yen. Japan announced that core machinery orders fell 7.1 percent in December from a month earlier, as companies remained cautious about boosting orders amid the strong yen and a slowdown in global demand. USDJPY rose to 77.22 from the Asian session open of 77.03.