Fxnet Daily Market Analysis - Euro Hits One-Month High Against Dollar

[Guest FxNet]

The euro briefly made a one-month high versus the dollar early on Wednesday and briefly brushed the key $1.3600 level. The strength was partly due to positive news from Germany that German Chancellor Angela Merkel reached a deal with the Social Democratic party (SDP) after weeks of negotiations following the German federal elections in September.

The euro ended the Asian session at $1.3579 with a 0.05% gain. Against the yen, the euro made a new 4-year high of 138.15 and ended with a 0.3% gain at 137.86 yen.

The dollar fared a little better against the yen, and managed to bounce off 2-day lows of 101.13 and regained some losses, adding around 0.2 percent to 101.50 yen.

Yen is struggling against most major counterparts due to the Bank of Japan's monetary easing policies and its commitment to bond buying which weakens yen.

Meanwhile today BOJ board member Sayuri Shirai reiterated in a speech in Tokyo that the BOJ should not hesitate to ease monetary policy further if risks arise to the economy.

The Australian dollar remained weak around 3-month lows against the greenback. Weighing on the aussie is the threat of interest rate cuts by the RBA after comments from Governor Stevens that the AUD value is too high. The aussie hit a low of 0.9087 on Tuesday and traded at around $0.9124 in Asia today.