The euro pared all gains made against the U.S dollar to trade to a low of 1.4364 from the high of 1.4434 reached in the previous European session. Investors shifted away from the Single Currency as their concerns grow over the euro zone debt crisis rose after German Chancellor Angela Merkel on Sunday repeated her rejection against the issuance of joint euro bonds as a measure to aid fiscally weak peripheral EZ economies to be able to borrow, to prevent them from getting into debt. Meanwhile several economic data from Europe on Tuesday on PMI and sentiment index, are expected to come out worse than previous, hence putting euro under pressure.
GBPUSD opened North America at 1.6491 and progressed lower to 1.6434, taking direction from the euro. In the earlier session the pound gained as investors preferred it versus the volatile euro and dollar but gains were capped as risk aversion still exists due to uncertainty over the euro zone debt crisis and ahead of potentially weak economic data from Europe tomorrow. Meanwhile within the U.K. the recovery situation is bleak and the short to medium term outlook of the Bank of England is cautious.
The safe-haven Swiss franc continued to remain weaker against the dollar and the euro in the U.S. session. Markets were spooked today after the Swiss National Bank intervened in the one-month forward market to deter investors from buying the currency and are nervous that the central bank could intervene in the FX markets to prevent franc appreciation. USDCHF rose to a session high of 0.7905 from the open of 0.7861.
The yen traded mostly sideways against the dollar for most of the day as USDJPY remained well off the record lows reached on Friday. Today Japanese Finance Minister Yoshihido Noda announced he will not hesitate to take measures should yen appreciate to dangerous levels. Therefore, a risk of BOJ intervention in the markets kept investors from buying yen. USDJPY opened the U.S session at 76.78 and traded above 76.70 and below 76.82.
The Canadian dollar pared all gains against its U.S. counterpart after opening the New York session. The loonie fell ahead of retail sales data due out on Tuesday which economists have predicted to fall from 0.5 to 0.3 percent Investors are also concerned overall about the outcome of the U.S. dollar after the Fed meeting on Friday in Jackson Hole. If there is more quantitative easing then the greenback weakens, which could affect trading with Canada since Canadian exports would be more expensive for the United States. USDCAD opened at 0.9841and rose to a high of 0.9905.