USD Posts Small Losses After EU Summit Ends

The summit of the European Union leaders ended without a clear outcome. Some progress was made, though, and the US dollar fell as demand for safety waned. The greenback still hangs near its opening level against most currencies.

The proposition of turning the independent European Central Bank for borrowing was rejected and instead the European Financial Stability Facility should be empowered to buy the bonds of the indebted nations. European Commission President Jose Barroso said:

We have discussed options for increasing the firepower of the EFSF. I’m sure that progress can be confirmed on Wednesday.

The work on devising the plans to resolve the problems of the EU is still only half-done and it’s hard to predict the end of the European debt story. As a result, most currency pairs are trading almost flat after the initial swing on the optimism caused by the end of the EU summit.

GBP/USD traded at 1.5949 as of 14:14 GMT today after the initial swing to 1.5999 from the opening rate of 1.5930. USD/JPY fell from 76.19 to 76.09, while earlier it touched 76.47.

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