Forex USA – Euro fell after Italian bond auction; USDJPY close to record low

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Forex Economic News: China’s Manufacturing PMI experiences slower expansionEURUSD surrendered its 2 percent gains from Thursday’s post-EU summit euphoria which began to fade today. Investors preferred to hold onto gains going into the weekend. Also, sentiment was slightly bruised after a disappointing Italian bond auction resulted in yields rising to pre-summit highs of 6 percent. This gave a grim reminder to investors that they cannot get too comfortable yet and the euro zone still has a long way to go until the debt crisis is resolved. EURUSD traded sideways today, off the seven-week highs, with more downside interest, touching lows of 1.4133 in the US session.


GBPUSD hit a new seven-week high of 1.6140 in the US session today, peaking at 1.6151, after opening at 1.6151.The pound is on track for marking its biggest monthly gains against the dollar since April, helped by a strong rally in riskier currencies after the euro zone deal and solid U.S. growth data eased concerns about a slowdown in the global economy.


The Canadian dollar weakened against its U.S. counterpart as the euro- euphoria faded after a disappointing Italian bond auction and disappointing U.S. economic data but the loonie is still above parity against the greenback. Commodity prices were also weaker, which added pressure to the commodity price-sensitive Canadian currency. USDCAD opened NY at 0.9928 and hit a high of 0.9969.


USDJPY hovered around the record low of 75.65 today and a actually fell just one pip above that low, reaching 75.66 in the US session, testing Japanese authorities nerves. Japanese Finance Minister Azumi again repeated a warning today that he would take firm steps against the yen’s rise as needed. The dollar has been broadly weaker this week and mostly negative US data today weighed the currency.


The Swiss franc has been mostly range bound today but slightly weaker against both the euro and the dollar giving back gains made in the past two days. The franc was under pressure after disappointing Swiss economic data. The Swiss KOF economic indicator fell for a sixth straight month, due to the strong franc affecting Swiss exports. USDCHF traded between 0.8611-50 and EURCHF hit a high of 1.2236 and low of 1.2198.


AUDUSD soared to a two-month high of 1.0752 yesterday putting the aussie on course for its biggest monthly gain since May 2009. Profit-taking brought the pair down earlier in the day, touching lows of 1.0657 then rose back up to 1.0730.