Yesterday, the common currency recorded huge gains against the U.S. dollar after the European Central Bank decided to provide dollar supply for European banks in coordination with the Federal Reserve, the Bank of England, the Bank of Japan and finally the Swiss National Bank, where the Bank aims to prevent interbank lending freeze as seen in the financial crisis by adopting three more U.S. dollar liquidity-providing operations with 3 months maturity till the end of the year.
The European finance ministers gathered for a two-day summit in Poland today, where all eyes are focused on the meeting, awaiting the results in regards to Greece, and the debt crisis in general. The euro returned to trade lower; however, the currency recorded gains over weekly basis after two weeks of losses.
The dollar index rebounded to the upside after the losses seen since opening this week, where the dollar advanced against the common currency and the Swiss franc, while it is fluctuating heavily against the sterling pound. On the other hand, the dollar is barely moving against the Japanese yen.
The dollar index opened the session this week at 77.45, and recorded the highest in more than six months at 77.77. The low yielding currency retreated after then to reach a low of 76.06. Over daily basis, the greenback opened the session today at 76.27, and recorded a high of 76.69 and a low of 76.22, and is currently hovering around 76.59.
Moreover, Luxembourg Prime Minister, Jean-Claude Juncker, who chairs meetings of the euro-zone finance ministers, said at a press conference today that a decision will be made in October in regards to providing Greece with the next payment of 2010 aid package. Junker also added that lawmakers see renewed efforts by the Greek government to meet the spending cuts target.
Concerning the EUR/USD, the pair declined after opening the session today at 1.3876 to reach a low of 1.3775. The pair also set the highest at 1.3892 and trades currently around 1.3795. In general, the common currency recorded huge gains during this week, after the obvious improvements seen within the zone. Technically, the pair could extend the downside movement as long as stability is seen below 1.3910.
Among other major currencies, the U.S. dollar has gained strength against the Swiss franc, where after the USD/CHF pair opened the session at 0.8688, it inclined to reach a high of 0.8754, and is currently trading around 0.87410.
The Sterling pound fluctuated heavily against the dollar, to currently trade bearishly around 1.5785, where the GBP/USD pair opened the session at 1.5801, and recorded a high of 1.5829 and a low of 1.5743.