Forex News Europe – Euro gains ahead of Cannes meeting; US jobs data lifts sentiment

Important: This page is part of archived content and may be outdated.

EURUSD gained 1.3 percent on the day after the big fall yesterday following Greek Prime Minister’s shock announcement on putting the Greek bailout deal to a referendum. Today investors are short covering, which helped prop up the euro as there is anticipation that something will come out of the emergency meeting with Papandreou and his German and French counterparts in Cannes today. Merkel and Sarkozy pledge to implement the EU Summit debt deal no matter what. Meanwhile, the US ADP jobs report came in better than expected, which boosted risk currencies and weakened the dollar against them. EURUSD rose to a European session high of 1.3819 from the session open of 1.3726.


GBPUSD was lifted due to the EURUSD rise but also positive UK economic data helped boost sterling. UK construction sector PMI unexpectedly jumped to a 5month high of 53.9 in October from 50.1 in September. GBPUSD rose 70 pips to 1.6046 from 1.5975. Sterling could not compete against a broadly stronger euro, with EURGBP rising to 0.8622 from 0.8590.


USDJPY traded lower as on-going risk aversion help the yen recover ground versus the dollar. Investors turned to the safe haven yen and ignored BOJ intervention threats since the Europe debt crisis was more dominant in driving markets today. USDJPY opened in Europe at 78.12 and drifted lower to hit a session low of 77.93 before turning back up after better than expected US jobs data. A broadly stronger euro soon lifted EURJPY to 107.87 to recover earlier losses.


USDCAD initially surged in early European trading due to damp risk appetite over the Greek referendum chaos and fears of a widespread Europe debt crisis spiralling out of control. But sentiment improved throughout the session especially after the ADP jobs report showed more job creation in the US. The Canadian dollar began to regain ground as crude oil prices rose again (Canada’s major export). USDCAD fell off highs of 1.0200 down to 1.0111. The focus turns to the US Fed policy meeting later today which will determine US Dollar direction.


The Swiss franc recovered losses against the dollar today after recording the biggest daily losses in eight weeks yesterday following a Swiss industry report that indicated manufacturing output shrank more than economists forecast in October, adding to signs the economic slump is deepening in Switzerland. Flight to safety propped up the franc today as investors fret over Greece and the European debt crisis. USDCHF fell to 0.8795 from 0.8847. EURCHF is hovering around four-week lows but supported above the floor set by the SNB at 1.20.