Article Highlights

  • CA retail sales: -2.0% vs. -0.4% expected, 0.4% previous
  • CA core retail sales: -2.3% vs. -0.8% expected, 0.6% previous
  • US flash manufacturing PMI: 54.3 vs. 53.6 expected, 53.9 previous
  • Greece gets 4-month bailout extension
  • BOJ monetary policy meeting minutes on tap
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Risk appetite was the name of the game for most currencies, as forex traders priced in Greece’s bailout extension.

The euro was front and center during the U.S. forex trading session after Eurogroup and Greek officials agreed to a four-month bailout extension for Greece. Though details have yet to be hashed out this week, the delay of a possible Grexit was enough to satisfy a couple of currency bulls.

EUR/USD ended the session 63 pips higher (+0.56%) to 1.1377 while EUR/JPY jumped by 134 pips (+1.00%) to 135.48 and EUR/GBP shot up by 34 pips (+0.46%) to .7394.

Risk-taking also extended to other high-yielding currencies, which weighed on the low-yielding yen. If you remember, the yen found support in the Asian trading session after Japan’s Finance Minister Amari suggested that the yen’s current levels are appropriate for the time being.

GBP/JPY rocketed by 97 pips (+0.53%) to 183.23 while AUD/JPY also found a 38-pip boost (0.41%) to 93.40.

Currency bulls stayed clear of the Loonie though. The Canadian dollar received a one-two punch of falling oil prices and weaker-than-expected retail sales data from Canada. Consumer spending suffered its biggest monthly drop in five years mostly due to oil prices dropping by 7.4% in December and consumers generally spending less.

USD/CAD popped up by 97 pips (+0.78%) to 1.2545 while CAD/JPY slipped by 32 pips (-0.34%) to 94.92 and AUD/CAD rose by 74 pips (+0.76%) to .9841.

Which way will risk-taking go today? The BOJ’s meeting minutes was released a couple of hours ago, with details revealing that members are generally happy with their fight against deflation. No other major report is scheduled for release for the next couple of hours, so watch out for traders’ reaction to the BOJ minutes and look for possible extension of last Friday’s moves.

Good luck and good trading!

See also:

London Session Recap

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