European Session – Euro steadies as China concerns ease
June 25, 2013 12:33 pm
Most risk currencies and commodities as well as equities saw some recovery in the European session after recent losses as a result of concerns of liquidity conditions following developments from U.S. and China central banks in the past few days.
There’s been a bit of profit-taking on dollar gains and the ICE dollar index retreated from near three-week highs.
Volatility in currencies surged since the Federal Reserve signaled last week it may start tapering stimulus later this year.
Risk aversion was heightened also on concerns that China’s tightening on credit could affect growth in the world’s second largest economy.
Currencies have been quite overextended against the dollar and long overdue for some correction.
The dollar eased after Federal Reserve officials like Dallas Fed President Richard Fisher played down fears over an imminent end to the Fed’s stimulus program. Fisher said that the market was overreacting.
Euro is still range bound, although a little higher than the Asian session. EURUSD ended the European session flat, after opening at $1.3115 and hitting an early high of $1.3149, the pair fell back to $1.3112. Dovish comments from ECB’s Coeure helped cap gains in the single currency.
Sterling was helped higher due to the broadly weaker dollar, but met stiff resistance at $1.5476, slightly beating yesterday’s high. Support was found at $1.5424.
The yen rose against the dollar as risk aversion pushed investors to the Japanese currency’s relative safety on concerns about a credit crunch in China and Fed tapering.
Aussie extended north from a late Asian session low of $0.9195, fuelled by recovery in Chinese equities. After peaking at $0.9295, further gains were capped and selling ensued.
Most risk currencies and commodities as well as equities saw some recovery in the European session after recent losses as a result of concerns of liquidity conditions following developments from U.S. and China central banks in the past few days.
There’s been a bit of profit-taking on dollar gains and the ICE dollar index retreated from near three-week highs.
Volatility in currencies surged since the Federal Reserve signaled last week it may start tapering stimulus later this year.
Risk aversion was heightened also on concerns that China’s tightening on credit could affect growth in the world’s second largest economy.
Currencies have been quite overextended against the dollar and long overdue for some correction.
The dollar eased after Federal Reserve officials like Dallas Fed President Richard Fisher played down fears over an imminent end to the Fed’s stimulus program. Fisher said that the market was overreacting.
Euro is still range bound, although a little higher than the Asian session. EURUSD ended the European session flat, after opening at $1.3115 and hitting an early high of $1.3149, the pair fell back to $1.3112. Dovish comments from ECB’s Coeure helped cap gains in the single currency.
Sterling was helped higher due to the broadly weaker dollar, but met stiff resistance at $1.5476, slightly beating yesterday’s high. Support was found at $1.5424.
The yen rose against the dollar as risk aversion pushed investors to the Japanese currency’s relative safety on concerns about a credit crunch in China and Fed tapering.
Aussie extended north from a late Asian session low of $0.9195, fuelled by recovery in Chinese equities. After peaking at $0.9295, further gains were capped and selling ensued.
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