EURUSD fell by over 2 percent today on renewed worries about last week’s euro zone plan to stem its debt crisis. These concerns also affected US futures broker, MF Global, whose heavy exposure to euro zone bonds sent its shares plummeting in recent days and ultimately filed for bankruptcy today. This dampened sentiment as it reminded investors that any exposure to the euro zone remains risky until its debt crisis is resolved. The announcement late in the US session accelerated euro decline to $1.3827 from the NY open of 1.4012.
GBPUSD hit an eight-week high in the US session after gaining back all losses from earlier in the day, hitting a high of 1.6165. However, sterling soon weakened again to drop to 1.6069 to follow EURUSD, after risk appetite was dampened on the announcement of MF Global’s bankruptcy.
USDCAD had a mixed day, initially with a stronger US dollar afte the BOJ intervention but then the loonie gained strength especially after Canada GDP data showed growth increased by more than forecast in August. USDCAD fell to 0.9931 from 0.9955. But damp risk appetite lifted the greenback up again as investors turned to the safe haven liquid USD. Crude oil prices reversed downwards after the MF Global bankruptcy announcement, which weighed on the commodity-price sensitive CAD.
USDJPY opened New York at 77.91, around the level where the pair had eased to and settled into a range after jumping 5 percent earlier in the day following the Bank of Japan intervention in the currency markets to curb yen strength which was hurting Japanese exporters. Yen also depreciated against the British pound and the Australian dollar but not so much against the euro which broadly weakened in the US session on renewed eurozone debt concerns. EURJPY fell to 108.10 from the Asian session high of 111.57, post-intervention high.
USDCHF rose by 2 percent on the day on a broadly stronger US dollar following the BOJ intervention in the currency markets. Also, by the US session, risk sentiment began to dampen on renewed euro zone debt concerns. This was amplified after US broker, MF Global announced it was filing for bankruptcy due to its large exposure to euro zone debt. USDCHF rose to 0.8785 from an earlier day low of 0.8609.