South Asian News Agency (SANA) ⋅ January 3, 2012
SINGAPORE – The euro edged higher against the dollar and the yen
but touched a record low versus the Australian dollar and looked set to
remain under pressure in 2012 on worries over Europe’s debt crisis.
The euro gained a bit of reprieve as a rise in Asian equities
underpinned risk appetite and spurred short-covering, helping it stay
above an 11-year low against the yen touched the previous day.
Still, worries about high sovereign debt levels and lack of policy
solutions to the region’s 2-year-old debt crisis were expected to push
the euro lower in the coming weeks and months, even if short-covering
may offer the euro some intermittent support.
“The concerns that investors have, have certainly not gone away at
all,” said Callum Henderson, global head of FX research with Standard
Chartered Bank in Singapore.
“The overall bias remains for more euro weakness…given the growth and
debt dynamics,” he said, adding that Standard Chartered’s forecast was
for the euro to fall in the next three months and to stand at $1.20 at
the end of the first quarter.
The euro rose 0.3 percent to $1.2979, but stayed within striking
distance of its 2011 trough of $1.2858 hit last week on trading platform
EBS.
Against the yen, the euro rose 0.3 percent to 99.78 . It fell to as
low as 98.71 yen in holiday-thinned trade on Monday on trading platform
EBS, its lowest since December 2000.
A trader for a Japanese bank in Singapore said there were likely to
be FX options-related stop loss offers at levels around 98.50 yen, while
some stop-loss bids were lurking above 100.50 yen.
“Positioning among traders, especially short-term players, is tilted
toward being short the euro on the crosses,” the trader said, adding
that the euro might rise to around 102 yen relatively easily if
short-covering gains sustain.
Earlier on Tuesday, the single currency reached a record low on the Australian dollar right below A$1.2600.
It was last at A$1.2617, having shed more than two cents in the past
week. Technical charts point to further downside with a test of A$1.2500
in sight, according to a trader.
The rise in Asian shares over the weekend also gave a boost to the
Australian dollar, which rose 0.5 percent against the greenback to
$1.0285.
