The Euro has been slowly edging up since Friday’s 7- week low of 1.4047 against the greenback, peaking at 1.4234 in late US trading. The Single Currency has been trading in a range since yesterday but choppy on Tuesday as traders remain cautious on the existing possibility that Greek restructuring could still take place. However, overall sentiment has improved, possibility buoyed by the fact that a rate hike by the ECB is still a huge possibility in the near future, especially after ECB Executive Board member Gertrude Tumpel-Gugerell mentioned in an interview that monetary policy is still accommodative. Some traders are taking advantage of the current lower levels for bargain hunting, confident the EURUSD will remain above the critical $1.40 support level, which it has been able to so far.
Sterling managed to erase losses from the earlier session, when it dropped after data showed consumer prices rose this month, consequently leading investors to dismiss any expectations of a rate hike in the near future. The high prices and higher inflation risk firmed the gloomy views investors have of the British economy lately, putting a damper on the Pound. From a low of 1.6185, GBPUSD rose to a US session high of 1.6265, giving an opportunity for some profit taking on any long positions.
The Canadian Dollar depreciated against a stronger greenback today, the latter being buoyed by renewed risk aversion. Declining oil prices further dragged down the Loonie which has a strong correlation with commodities, being an oil producer itself and a major exporter to the United States. Canada’s currency dropped to its lowest level versus the greenback since March 28th, with the USDCAD pair touching 0.9792. Meanwhile crude Oil for June delivery reached a low of 95.01 in the US session, at 11am CET. Towards the end of New York trading, the pair declined, to reach near the open level, as some traders unwind long positions.
The Swiss franc started the new trading day with losses against the greenback from early on in the Asian session today to the end of the European session, then erases all losses to make gains equal to the losses. USDCHF dropped from the day high of 0.8881 down to 0.8803. Earlier in the day, strong Swiss fundamentals gave reason to believe that the SNB will not likely tighten monetary policy soon, hence bringing down the Franc this morning.
Gold prices traded mostly in a range since the start of the trading week in the Asian session to the open of the US session, when it made a huge drop from 1495.33 down to 1471.63. Weak housing data and lower factory manufacturing for this month dragged down gold as dollar strength and commodity declines are an indication of slowing global economic growth.