The US dollar strengthened across the board benefiting from safe haven flows as the market continued to digest the International Monetary Fund (IMF) and European Central bank's $1 trillion rescue package aiding Greece. The market's positive reaction to the strong measures faded and pessimism around potential problems with other southern European countries dominated in early trading.

Look for the dollar to hold close to current levels as the market looks towards unemployment data on Thursday and retail sales on Friday.

The euro weakened as uncertainty grew over details of the IMF's rescue package in regards to how the government will manage bond purchases. Also weighing on the currency is another potential downgrade of Portugal. Look for the euro to remain under pressure in volatile trading as the market pushes back the timeline for interest rate hikes from the European Central Bank.

Sterling remained under pressure as political uncertainty took focus with Britain's two big rival political parties courting the smaller liberal Democratic Party. 

The Japanese yen benefited from safe haven flows coupled with Japanese exporters selling other currencies. Look for the yen to remain within its recent trading range continuing to hold above 92.60.

The Canadian dollar moved lower as oil prices fell below $76 a barrel. With no major Canadian data out today, look for the loonie to hold within a tight range.

The Australian dollar and New Zealand dollars weakened as the market digested the IMF's rescue package and a flight back into safe haven currencies prevailed. Look for the Aussie to remain under pressure as Australia proposes a super tax on miners. The kiwi, however, will hold close to current levels as the market anticipates the Reserve Bank of New Zealand's first rate hike next month.

 

 

 

 

Indicative rates:

EUR/USD

1.2732

USD/JPY

92.53

GBP/USD

1.4936

USD/CAD

1.0189

USD/MXN

12.5240

USD/CHF

1.1046

AUD/USD

0.9000

NZD/USD

0.7218

10-Year Treasury Note Yield: 3.565%

Dow Jones Industrial Average: 10,775.84 - 6.80