Forex U.S. Review – Commodities lift Canadian Dollar, Euro rises on ECB interest rate hike hopes

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The Euro hovered around the two-week high it reached against the Dollar prior to the Greek parliament vote just as the U.S. session was opening. After the news was announced that the vote passed, Euro dipped as loing positions were unwound on profit-taking. The pair soon rebound to previous highs, lifted by expectations of a rate hike by the ECB which meets next week. Now that the Greek vote is more or less out of the way, the focus can turn to other matters such as interest rates. EURUSD rebounded from a low of 1.4331 to climb as high as 1.4443, remaining flat till the close of the session, waiting until further news tomorrow from Greece regarding approving legislation to implement the austerity measures.


Sterling rose to its highest level in over a week against the Dollar, lifted off lows it has been hovering at due to a slew of weak fundamentals and data indicating the British economy is still struggling. After the Greek vote passed austerity measures, risk appetite built up, which helped lift the Pound and sank the Dollar as commodities also rose. Against the Euro, Sterling movements were mainly driven by a falling Euro after investors closed long EURGBP positions taken in the run-up to the Greek vote. The Pound moved off its eight-week low against the Single Currency, making EURGBP fall to 0.8966 from 0.9014.


The Swiss Franc weakened against most of its major counterparts since the previous session when the KOF economic barometer showed a decline in June. Also, the news that Greece passed through a vote on austerity measures gave markets an optimistic sentiment, thereby moving away from safe haven currencies like the Swiss currency. EURCHF rose from lows of 1.1978 to a high of 1.2053 late in the U.S. session.


The Canadian Dollar strengthened as commodities gained today, stabilized by increasing risk appetite after the successful Greek austerity vote. The loonie is a commodity-linked currency since Canada is a major exporter of crude oil. What also lifted oil prices was a decrease in crude inventories as announced by the EIA this afternoon. Meanwhile, early in the U.S session, important economic data from Canada indicated that consumer prices rose in May by 0.7 percent versus a gain of only 0.3 percent in the previous month, thereby giving markets hope that the Bank of Canada will raise interest rates soon since inflation is rising. USDCAD fell to 0.9688 from the session open of 0.9768.


Gold prices remain rangebound after being lifted to a session high of $ 1,512.78 from $1503.03. Gold has advanced for the past two days, but its gains seem to be capped since the hype over the Greek vote has been reached and unless there are new fundamentals or significant news that will affect the global economy, gold priced will remain stable. Perhaps as more news emerges from Greece tomorrow regarding winning approval for legislation on implementing the austerity measures, could affect gold prices.



(12:00 GMT)

1.4427 1.6016 0.8335 0.9768 1508.18
DAY’S HIGH 1.4447 1.6073 0.8367 0.9768 1512.78
DAY’S LOW 1.4331 1.5982 0.8323 0.9688 1503.03

(21:00 GMT)

1.4429 1.6059 0.8349 0.9704 1510.68

Note: Daylight Savings Time in Effect for GMT