US Session – Euro hits $1.30 as euro zone contagion fears subside
March 22, 2013 8:37 pm
The euro rose against the dollar briefly breaking above $1.30 on Friday on optimism that a crisis in Europe may be averted. The US trading session was clearly more upbeat, also helped by a rally in equity markets. There is relief that the contagion will be contained in Europe and there is confidence that the ECB has enough back stops in place to prevent spreading of financial risk throughout the whole region. The ECB’s OMT program (Outright Monetary Transactions) is such a program.
Data from Germany, showing a softer Ifo confidence index did little to affect euro.
EURUSD rose to an intraday high of $1.3009 before settling around $1.2980. Earlier in the day, the pair reached a low of $1.2887.
Sterling experienced some volatility, after Fitch downgraded the UK’s credit outlook to negative watch and puts at risk the country’s AAA rating. Fitch cited high government debt levels and weak growth.
GBPUSD had started the day at $1.5164 and rose to a high of $1.5247, managing to weather the storm after the Fitch news.
The yen was little changed against the dollar today, with USDJPY trading between 94.18 and 95.01 yen. EURJPY was able to rise from an intraday low of 121.44 to a high of 123.45 as euro broadly gained against other currencies.
There is some uncertainty over yen since yesterday, new Bank of Japan governor, Haruhiko Kuroda at his inaugural news conference didn’t offer any specifics on policy easing the central bank may undertake. However, in the long term, yen is expected to weaken as the BOJ will start to adopt bolder monetary easing steps.
The euro rose against the dollar briefly breaking above $1.30 on Friday on optimism that a crisis in Europe may be averted. The US trading session was clearly more upbeat, also helped by a rally in equity markets. There is relief that the contagion will be contained in Europe and there is confidence that the ECB has enough back stops in place to prevent spreading of financial risk throughout the whole region. The ECB’s OMT program (Outright Monetary Transactions) is such a program.
Data from Germany, showing a softer Ifo confidence index did little to affect euro.
EURUSD rose to an intraday high of $1.3009 before settling around $1.2980. Earlier in the day, the pair reached a low of $1.2887.
Sterling experienced some volatility, after Fitch downgraded the UK’s credit outlook to negative watch and puts at risk the country’s AAA rating. Fitch cited high government debt levels and weak growth.
GBPUSD had started the day at $1.5164 and rose to a high of $1.5247, managing to weather the storm after the Fitch news.
The yen was little changed against the dollar today, with USDJPY trading between 94.18 and 95.01 yen. EURJPY was able to rise from an intraday low of 121.44 to a high of 123.45 as euro broadly gained against other currencies.
There is some uncertainty over yen since yesterday, new Bank of Japan governor, Haruhiko Kuroda at his inaugural news conference didn’t offer any specifics on policy easing the central bank may undertake. However, in the long term, yen is expected to weaken as the BOJ will start to adopt bolder monetary easing steps.
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