Daily Forex Overview

Previous session overview

The euro fell against the U.S. dollar and yen Monday in Asian trade, hurt by renewed worries about Greece's debt crisis, but remained within recent ranges as the dollar took a small hit from the approval of an ambitious health-care bill by the U.S. Congress.

The euro bounced from levels close to the intraday low against the greenback after the U.S. House passed a far-reaching, USD940 billion bill that will subject U.S. industries to a redrawn and newly-regulated marketplace, and may worsen the country's fiscal picture in coming years.

Against the yen, the dollar traded at JPY90.47 from JPY90.50, as investors sought the safety of the yen amid jitters about the possibility of faster monetary tightening in emerging markets, following Friday's unexpected rate hike by the Reserve Bank of India.

The ICE Dollar Index, which tracks the dollar against a trade-weighted basket of currencies, was at 80.834 from 80.740.

The Euro with no resolution to the ongoing Greece saga there was little incentive to buy the Euro and with weak Oil and Stocks the pair slipped back to USD1.3500 support. German PPI was at 0.0% v.s. 0.1% m/m forecast.

The British pound held on to its recent gains after better than expected economic data, but weakened slightly after the Philly Fed report from the US. The Office for National Statistics said public sector net borrowing in February was GBP 12.361 billion (USD18.88 billion), well below economists' forecast of GBP 14.75 billion.

Continuing worries surrounding the Greek government's fiscal position weighed the Australian dollar in Asia Monday in a thin session devoid of any local data.

Market expectation

The dollar is higher against the euro and sterling Monday, while investors take a break from stocks and park funds in less volatile instruments. Concerns over Greece's fiscal problems persist although trade was quiet with Japanese traders on holiday.

More volatility and weakness are in store for the euro this week as European Union leaders debate whether to offer a lifeline to debt-strapped Greece.

Currency markets aren't expecting the E.U. summit Thursday and Friday to yield a specific plan to support Greece, but contradictory statements in the run-up to the event will whip the euro around. Even if an agreement is reached, the common currency may not necessarily benefit for long. The problems of deflation and weak growth will continue to hold it down.

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