Forex US Review – Dollar hurt by weak US data, Canadian loonie gains

Important: This page is part of archived content and may be outdated.

The Euro extended gains against the Dollar in the US session as investors returned to the Single Currency after a huge sell-off last week. Optimism is growing ahead of the Greek parliament vote scheduled for Wednesday, when tough austerity measures are expected to be passed through in order for Greece to be able to receive further financial aid. What added an increased boost to the Euro was news that France produced a draft of a solution for banks holding Greek debt to be able to roll over maturing Greek bonds and swap them for new long-term bonds, a move backed by Germany. EURUSD rose to a session high of 1.4292 from a low of 1.4167.

Sterling continued to decline against the Euro. The absence of significant economic data from the UK could not support the Pound against the Single Currency that was stronger across the board based on market optimism ahead of the Greek austerity vote. EURGBP rose 54 pips to a session high of 0.8942 from the open price of 0.8888. Meanwhile, Cable was choppy during the US session as GBP struggled to rise against the Dollar but fell after hitting a high of 1.6011. Sterling is still being weighed down by negative sentiment on the British economic recovery following recent disappointing BoE minutes and low rate hike expectations.

The Swiss Franc lost its safe haven demand against a rising Euro as risk sentiment fell today. EURUSD rose to 1.1956 from 1.1854. Investors are expecting the Single Currency to remain stable as European leaders are clamouring to find a solution to avert a Greek default on debt. However, the US Dollar initially hovered near record lows against the Franc, dipping to 0.8317 before rebounding to a session high of 0.8376. USD was hurt by weak economic data released early in the US session today on US personal consumer spending and personal income.

The Canadian Dollar gained 50 pips against the greenback as crude oil prices stabilized. Canada is a major crude oil exporter and a commodity-linked currency, so its currency is greatly affected by movements in oil prices. Meanwhile, the US Dollar was weakened against the Loonie after disappointing economic data this afternoon on personal consumption and personal income in the U.S. which reminded investors of the slumping US economy. USDCAD dropped to 0.9857 from an earlier high of 0.9907.

Gold fell to its lowest level of the month as risk sentiment falls due to the optimism building up ahead of the Greek austerity vote and more investors switching their investments away from the safe haven asset. Investors expect some kind of solution to be found to prevent indebted Greece from defaulting. Spot gold fell to $1,490.58 from $1,502.73.

Note: Daylight Savings Time in Effect for GMT