Forex U.S. Review – USDCHF touches record low, Euro remains strong

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The Euro extended gains against the Dollar in the US session after the Portuguese government said it plans to be conscientious in meeting terms of a financial bailout and hopes to regain the markets’ confidence. Meanwhile, Greece’s parliament is set to vote on Wednesday and Thursday on a new austerity programme required for it to receive further aid from the EU-IMF. France’s proposal for banks holding Greek debt to be able to roll over maturing Greek bonds and swap them for new long-term bonds has helped support the Euro from crashing. EURUSD hit a session high of 1.4396, its highest level in almost a week.

Sterling fell against the Euro for a second straight day to touch its lowest level in eight weeks. EURGBP hit a high of 0.8982 in the U.S. session advancing from the session low of 0.8926. Meanwhile, against the Dollar, the Pound managed to move off five-month lows reached in the earlier session at 1.5910, to rebound to 1.6042 before dipping again. A spate of poor economic data from the U.K has weighed down the British currency. A UK government report released today gave evidence that the country’s current-account gap narrowed less than economists estimated in the first quarter.

The Dollar plummeted to a new all-time low against the Swiss franc of 0.8274 in the U.S. trading session today. The Swiss currency’s strength against the Dollar weakness was mainly due to the Franc’s status as a safe haven asset, and consequently was boosted as some investors are pessimistic that a viable solution will be reached to avoid a Greek default and also have concerns about the pace of economic recovery in the U.S. following some weak economic data today indicating a drop in U.S. home prices according to the Case-Shiller index. Meanwhile, the Euro advanced against the Swissie, strengthened on expectations the Greek austerity vote will pass on Wednesday. EURCHF climbed to highs of 1.1958 from lows of 1.1862.

The Canadian Dollar gained against the U.S. Dollar ahead of the Greek parliament vote on Wednesday night to pass tough austerity measures. There appears to be optimism in the markets that a solution will be reached to prevent Greece from defaulting. Meanwhile, rising oil prices helped lift the loonie which is a commodity-linked currency. Canada is a major crude oil exporter and a commodity-linked currency, so its currency is greatly affected by movements in oil prices. The Canadian Dollar gained 66 pips against the weaker greenback as poor housing data dragged down the Dollar. The Case-Shiller index indicated U.S. home prices are falling. USDCAD dropped to 0.9817 from an earlier high of 0.9883.

Gold prices remain rangebound, as investors are in a wait-and-see mode ahead of the Greek austerity vote on Wednesday. Depending on the direction the Euro will subsequently take after the vote, investors will either turn to the safe haven asset or seek riskier assets. The precious metal has been trading at its lowest levels of the month since Monday. Dollar weakness has helped support a further decline, since gold and dollar have an inverse relationship. Spot gold traded the US session between highs of $1,506.23 and lows of $1,495.43.

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