The euro gained against the dollar as European Union leaders reached an agreement that alleviated concern banks will fail and spurred optimism they are closer to resolving the region’s sovereign-debt crisis. The dollar fell against all its major counterparts this week after EU officials during a two-day summit in Brussels dropped the requirement governments get preferred-creditor status on crisis loans to Spanish lenders. The themes this week were all around the EU summit and the anticipation that nothing of any substance was going to be resolved then headlines proved that to be incorrect. The euro rose 0.8 percent this week to $1.2667, after touching $1.2407, a three-week low, before the summit. EU leaders completed their 19th summit to discuss measures to stem a debt crisis that’s spurred five euro members to seek international bailouts. Euro-bloc finance ministers will enact the deal on loans to Spanish banks at a meeting on 9th of July, European Union President Herman Van Rompuy said, calling the accord a “breakthrough.”
EUR/USD" title="EUR/USD" width="625" height="334">
GBP/USD
The British pound gained slightly over one cent against US dollar, as GBP/USD closed just shy of the 1.57 mark, at 1.5698. The pound moved up sharply at the end of last week, following the surprise announcement at the EU Summit. At the Summit, the leaders announced measures designed to combat the debt crisis and aid struggling EZ members, notably, allowing for the direct recapitalization of banks from Euro-zone rescue funds.
GBP/USD" title="GBP/USD" width="624" height="468">
USD/JPY
Japan’s industrial output fell the most since the March 2011 earthquake and consumer prices declined, bolstering the case for extra stimulus to sustain the nation’s economic recovery. Production declined 3.1 percent in May from April, the Trade Ministry said in Tokyo. A holiday may have played a role and Mitsubishi UFJ Morgan Stanley cited post-quake difficulties in seasonal adjustments. Consumer prices excluding fresh food fell 0.1 percent in May from a year earlier. Weakness in European demand limited automobile output, underscoring the risk to Asia from the region’s crisis as euro-area leader’s grapple with limiting the spread of sovereign-debt woes. Production of transportation equipment including automobiles slumped 11.1 percent in May, the biggest drag on output overall. The yen was still trading below $80, closing at $79.93 last before the weekend.
USD/JPY" title="USD/JPY" width="624" height="468">
USD/CAD
Canada’s dollar rose this month against its U.S. counterpart as optimism Europe is closer to resolving its debt crisis spurred demand for riskier assets. The currency had the biggest advance since November yesterday after European leaders agreed to relax conditions for emergency loans to Spanish banks. Stocks gained on the month and volatility fell the most since January, lifting the Canadian dollar. The nation’s employers added jobs in June for a fourth straight month, economists forecast before the 7th of July report. Canada’s currency, nicknamed the loonie for the image of the aquatic bird on the C$1 coin, gained 0.8 percent this week to C$1.0166 per U.S. dollar in Toronto. One Canadian dollar purchases 98.37 U.S. cents.
USD/CAD" title="USD/CAD" width="624" height="468">