Forex News Review – Euro holds onto gains, above $1.33

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The euro held on to gains made against the dollar today after E.U. finance ministers agreed to a temporary boost of the euro zone rescue fund lending limit to 700 billion euros from 500 billion. Also helping the euro was the release of the Spanish government budget cuts today, which showed the indebted nation is committed to reducing its debt. This calmed market fears that Spanish debt would spiral out of control and spread to the rest of Europe.

EURUSD rose to 1.3366 in early New York trading and hovered around those levels. Further gains were capped and there was a brief dip to 1.3308 following strong U.S. data that boosted the dollar immediately after.

The U.S. dollar was broadly weak mainly due to the last trading day of the first quarter, when most traders are repositioning and selling off the dollar.

The British pound hit a four-month high of 1.6035 17, up from 1.5948 late Thursday.

USDJPY ended the week lower compared to Monday. Friday high was 82.87 versus Monday high of 83.37. The week was dominated by dollar selling as Japanese companies rebalanced their books for the end of their fiscal year on March 31, and repatriated yen profits from abroad, buying yen. During the course of today, dollar did manage to claw back early losses by the end of the North American session, as the dollar was boosted after strong U.S. data showing an increase in personal spending by the most in seven months. Also U.S. consumer sentiment showed a sharp improvement.

USDCAD moved slightly higher after the strong U.S. personal spending data during the North American trading session. The Canadian dollar failed to gain much ground against the greenback after Canadian GDP data was unable to give direction. January GDP was in line with expectations at 0.1 percent versus a previous 0.5 percent.