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Forex - Dollar mostly lower ahead of EU, BoJ meetings

Published 01/20/2013, 10:01 PM
Updated 01/20/2013, 10:02 PM
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Investing.com - The U.S. dollar swooned against most of its major rivals during Monday’s Asian session at the start of what could potentially be a volatile week for major currency pairs.

In Asian trading Monday, EUR/USD rose 0.09% to 1.3328 as traders await headlines out of a meeting of European finance ministers in Brussels later today. Those policymaker are expected to discuss possible options for debt-laden Cyrpus, Greece and Spain.

Market participants will also be awaiting Tuesday’s ZEW report on German economic sentiment amid concerns over the outlook for the euro zone’s largest economy.

Also expected to be discussed is how the USD666 billion European Stability Mechanism can provide direct help to ailing Eurozone banks without being hampered by government interference.

USD/JPY slumped 0.57% to 89.58. The pair is backing off its highest levels since June 2010 as the Bank of Japan kicks off a two-day meeting today. Traders widely expect the central bank to raise its inflation target to 2% from 1% to be inline with Prime Minister Shinzo Abe’s demands. Last week, USD/JPY traded above 90 for the first time since mid-2010.

Elsewhere, GBP/USD fell 0.04% to 1.5871, extending last week’s losses that saw sterling hit a nine-month low against the greenback on fears a triple-dip recession is gaining steam in the U.K. GBP/USD and other pound-related pairs could be in focus as the week goes along because the U.K. is slated to release its fourth-quarter GDP number on Friday.

Later today, the U.K. is scheduled to release industry data on house price inflation, a leading indicator of demand in the housing sector.

The U.S. dollar was seen lower against the loonie despite lower oil prices as USD/CAD slipped 0.07% to 99.12. USD/CHF fell 0.08% to 93.40.

Looking at the dollar against some of the other riskier currencies, AUD/USD rose 0.08% to 1.0518 while NZD/USD fell 0.11% to 0.8354. The U.S. Dollar Index fell 0.10% to 80.06. U.S. markets are closed today in observance of the Martin Luther King, Jr. holiday.


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