The U.S. session was mixed, with some risk aversion initially but towards the end of the session the markets turned back up, lifting risk currencies and weakening the dollar.
Euro went into the North American session on a decline against the dollar, as investors fretted about Spain ahead of its budget presentation tomorrow which will reveal tough austerity measures. Spanish bond yields rose higher today, while Spanish workers were on strike all over the nation.
EURUSD opened the session at 1.3275 and touched a low of 1.3251 before clawing back losses to close up at 1.3293. Earlier in the day, the euro slipped due to the euro zone economic sentiment index falling in March. Also U.S. jobless claims data weighed on market sentiment.
GBPUSD bounced from a session low of 1.5871 to 1.5948 by the end of the session as the mood improved.
Yen made large gains today as Japanese companies did their month-end and quarter-end rebalancing, and importers sold off dollar and repatriated yen profits. USDJPY fell to a three-week low of 81.90, falling for a third straight day from 83.16 on Tuesday. The pair retraced slightly at the end of the U.S. session to 82.45. EURJPY fell to 108.75, losing 2.2 percent since Tuesday. Safe haven flows into yen also lifted the currency amid a risk averse market today.
AUDUSD touched a two-month low of 1.0303 during New York trading hours, as the commodity-linked currency was weighed down by falling commodity prices, also by concerns over China growth, which is a major export destination for Australian commodities. However, by the end of the session the aussie clawed back most of the days losses and bounced back up to 1.0381.
The Canadian dollar made back losses after the announcement of the Canadian Federal Budget which plans to return to a surplus by 2015. USDCAD fell to 0.9962 versus an earlier high of 1.0017.
Gold was little changed from yesterday’s close. After dipping to $1,644.63, the precious metal climbed up to $1,660.13 with the help of a weaker dollar in the U.S. session. The two assets usually have an inverse relationship.