EURUSD recovered losses to surge over 170 pips, spurred by the release of the EFSF Guideline Document that mentions that the rescue fund will be able to buy bonds on secondary market. This was a much needed boost for the euro which had suffered big losses in the previous two sessions as concerns grew over the euro zone debt crisis and hope for a resolution soon were beginning to fade. EURUSD opened Europe at 1.3672 and hit a high of 1.3841.Gains were capped after the dollar gained on positive jobs data.
GBPUSD began its ascent after better than expected UK retail sales data for September. Then sterling was boosted by a return of risk appetite across the markets fuelled by the release of the EFSF guidelines document. Cable bounced off lows of 1.5691 to peak at 1.5801. EURGBP jumped to an intra-day high of 0.8765 from a low 0.8708 as euro rose across the board.
USDCHF fell sharply from a high 0.9082 down to 0.8934. The pair began an early decline on profit taking but accelerated its fall after the EFSF guidelines and broad dollar weakness ensued due to risk appetite for other currencies. EURCHF began its fall from a 5-month high yesterday as it had reached overbought territory and fell due to key resistance levels and profit taking ensued even after euro had began to climb post-EFSF news. EURCHF fell from European session high of 1.2429 to 1.2330.
USDJPY finally broke out of its 76.66-76.84 range it has been trading all week, to surge to a high of 77.08 following positive US economic data that showed initial U.S. weekly jobless claims fell in the latest week. EURJPY rose from a session low of 104.87 to 106.29 on an overall strong euro today.
The Canadians dollar gained strength today against its US counterpart after huge losses yesterday. USDCAD fell by over a quarter-cent to an intra-day low of 1.0135 as investors shifted away from the relatively safe-haven greenback due to a rise in risk appetite fuelled by the 10:28GMT Reuters-reported news on an EFSF “guidelines document”.