EURUSD edged lower in Asia and settled in a range. Markets are cautious ahead of a key budget-confidence vote in the Italian parliament today. Political uncertainty and the surge in Italian yields have hurt the euro and created concern that Italy may have difficulty raising funds in the bond markets which could result in a liquidity crunch and send the sovereign debt crisis into deeper turmoil. EURUSD traded between 1.3737-1.3772.
The Swiss franc continued to weaken against the euro and the dollar on fears of a Swiss National Bank intervention after SNB President Hildebrand said recently the central bank is ready to take further measures to weaken the franc if economic outlook and deflationary developments make it necessary. USDCHF has gained 3.3 percent in the past three days to hit 0.9046 in Asian trading today. EURCHF is close to a three week high, rising to 1.2445, recording a 2.5 percent gain since Friday.
GBPUSD opened in Asia at 1.6050 and ended lower to close down at 1.6039 in a subdued Asian market session. EURGBP hovered around yesterday’s low at 0.8557 and could not break past a high of 0.8574.
USD/JPY remains out of the market’s focus and in a tight range around the psychological 78.00 level since the October 31 BOJ intervention. EURJPY is creeping lower, with investors wanting to sell it off and unload the euro but would rather wait for the outcome of the Italian parliamentary vote today. EURJPY opened at 107.49 and closed down at 107.27.
AUDUSD lost all gains made in yesterday’s North American trading session. The commodity-linked Australian dollar was propped up yesterday by rising commodity prices , particularly gold and crude oil, which eased down in Asian trading, further pressured by weak local data. Australia’s trade surplus was narrower than economists forecast.