Forex: Tuesday's review
On Tuesday the U.S. dollar shed against most of its rivals amid revived appetite for risky assets as stocks rose on better-than-expected company earnings. Partly the dollar dropped on hopes European officials will make progress toward a second bailout package for Greece as crucial factor to curb the region’s debt crisis.
The euro rallied against the dollar and rose from almost a record low versus the Swiss franc.
Lately market players concerned about possible spread of the EU debt crisis doubted that European leaders will solve the problem.
But many official persons, in particular German Chancellor Angela Merkel and Greece Finance Minister Evangelos Venizelos, said about their confidence that the EU leaders will reach agreement on new financial assistance program for Greece. It should be noted that the EU summit is scheduled for Thursday, July 21.
Australia’s dollar also climbed amid renewed investor appetite for higher-yielding assets Another factor to rise was today’ dovish minutes from the Reserve Bank’s last meeting, reduced expectations that policy makers will increase interest rates to curb inflation.
The Canadian dollar advanced to an 11-week high after the Bank of Canada left its rate at 1 percent the central bank’s policy statement.
Japan yen also gains.
EUR/USD: the pair shown high above $1.4200. Later the rate decreased and finished session in $1.4150 area.
GBP/USD: the pair shown high in $1.6180 area. Later the rate decreased and finished session in $1.6120 area.
USD/JPY: the pair shown low in Y78.80 area. Later the rate grown and finished session in Y79.20 area.
The UK dominates early data Wednesday, with releases at 0830GMT including lending data, but more importantly the minutes of the latest Bank of England MPC meeting. The BOE's release of Trends in Lending at the same time may cast light on whether presently very tight credit conditions for SMEs and mortgage borrowers are easing. Expect the latter to show a continuing flat trend in mortgage approvals and mortgage lending.