Forex Review – Euro advances as optimism builds ahead of Greek austerity vote

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The Euro advanced against most majors as many investors are optimistic the Greek parliament will succeed in passing through the austerity measures in a vote to be held this week. EURUSD was lifted by sovereign demand as traders covered short positions following a huge sell-off across the board last week. EURUSD rose to 1.4235 from the European session open of 1.4130. Gains were capped as the market focus turned before the end of the session on US personal income and spending data for May, but there was little change as data showed spending appeared stagnated.

Sterling rose against the Dollar during the first half of the session, boosted by the release of the Lloyds TSB Business Barometer index today which signalled a strong rebound in business confidence in June, suggesting that economic growth in the UK is set to pick up in the second half of 2011. The index rose to the highest level since May last year. GBPUSD rose to 1.6007 from 1.5933 before dipping to erase most gains made earlier.

The Swiss Franc gained against the US Dollar as some investors prefer to take caution in the safe haven Swiss currency ahead of the Greek vote as well as a ahead of US economic data on consumer spending to be released later today. USDCHD dropped 50 pips to 0.8327 from a high of 0.8377. The Euro also rose against the Swiss Franc early in the session but soon dropped down again almost erasing all gains, dipping to 1.1832 from the session high of 1.1882. On Friday EURCHF reached record lows, so investors buying the pair on dips to take profit from the all time lows, helped lift the Euro temporarily.

The Yen struggled against a rising Euro today with EURJPY rising over 80 pips to 114.85. On Friday the pair had reached the lowest levels since March as fears of the Greek crisis weighed the Euro down. Meanwhile USDJPY remained rangebound in the European session after rising 55 pips in the previous session, hitting a high of 80.87.

	EURUSD	GBPUSD	USDCHF	EURJPY	USDJPY
OPEN (07:00 GMT)	1.4130	1.5933	0.8365	114.03	80.68
DAY’S HIGH	1.4235	1.6007	0.8377	114.85	80.85
DAY’S LOW	1.4122	1.5925	0.8327	114.01	80.61
CLOSE (14:00 GMT)	1.4185	1.5930	0.8348	114.70	80.84

Note: Daylight Saving Time in effect for GMT

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