There was thin trading in the currency markets on Monday before the year-end holidays.
The euro traded close to a 2-year low of 1.2164 hit last week on December 23 against the dollar. This was the weakest level since August 2012 and the single currency is heading for a 6th month of losses as the divergence widens between the monetary policies of the European Central Bank and the US Federal Reserve.
Meanwhile there is a slight risk factor for the euro today ahead of a vote in the Greek parliament today that could result in snap elections if Greece’s prime minister Antonis Samaras fails to get his presidential candidate (Stavros Dimas) confirmed.
The yen strengthened slightly on some risk aversion that was caused by news of a suspected Ebola case in Japan. As a result, the dollar fell to a session low of 120.16 yen after reaching a high of 120.95 in early Asian session trading. However the greenback is still in sight of a 7-1/2 year high of 121.84 hit in early December.
The Australian dollar gained versus its US counterpart, rising to 0.8148 amid signs its largest trading partner -China – is taking measures to a loosen liquidity requirements at the country’s banks. These reports that China’s central bank will spur lending also helped gold rise as China is the world’s top consumer of gold.
The rest of the trading day is expected to be quiet as there are no major economic data scheduled for release today. Markets would look out for any news headlines coming out of Greece regarding the elections.