Euro Slips Across The Board Towards Late Asian Deals, Reverses To Franc Lately, Thursday, June 21, 2007 5:35:42 AM
The euro remained downwards against most other majors during late New York trading on Wednesday, continuing its previous session weakness. However, against the sterling, the common currency held steady in this time period.In the early Asian deals, the European currency trended slightly higher versus most other major currencies, but this time too, moved sideways against the pound.
Towards the end of the Tokyo deals, the euro slipped across the board, but has bounced back to the Swiss currency, lately.
The recent fall of the single currency may correspond to the yen`s strengthening following the hawkish comments by Toshiro Muto, the deputy governor of the Bank of Japan.
Muto said Thursday in a conference that the BoJ is committed to adjusting the interest rates in tune with the developments in the economy and the prices. He also indicated that Japan`s projected gross domestic product growth of around 2% may raise inflation expectations in the near future, while both upward and downward risks remain in the economies.
Trading took place in early European session on Thursday amid a lack of key economic data from major euro area economies. Apart from the Swiss trade balance data for May, there were a few domestic reports from Italy, but the news have failed to cause visible price effects in the euro-pairs.
Investors are now waiting for Friday`s German IFO business climate indicator for June. The index is widely expected to move down to 108.4 from its previous month reading of 108.6.
The euro trended higher against the dollar in early Asian deals on Thursday and the pair fetched as high as 1.3403 by about 2:55 am ET. The common currency then staged a fall versus the greenback, but from a session`s low of 1.3371, the pair has moved up to 1.338, lately. Largely, the pair has been on a downtrend since yesterday and if it continues, 1.332 can likely be a level of support in the near term.
The European currency trended higher against the Japanese yen during the Tokyo deals on Thursday. The pair gained momentum, likely supported by a Japanese economic release, which showed that Japan`s merchandise trade surplus grew at a slower pace in May than expected by analysts. Moving from 165.32, the pair leveled its previous session close of 165.67 towards the end of the Tokyo deals, but the euro weakened thereafter, likely pushed by the hawkish remarks by BoJ deputy governor Muto. As of now, the pair is trading near 165.4.
Against the British currency, the euro moved sideways during late New York trading Wednesday and in the early Thursday deals in Tokyo. The pair moved between 0.6719 and 0.6725 in this period, but thereafter, the pair fell sharply. By equaling as low as 0.6710 of a pound, the euro has hit a new multi-month low against that currency. If the pair weakens further, 0.668 can likely be a level of support in the long term.
Closing Wednesday`s New York deals at 1.6589, the euro held steady against the franc in the early Thursday deals in Tokyo. However, at about 8:40 pm ET, the pair gained ground and rallied to 1.6617 by about 3:00 am ET. The Swiss economic data is likely to have strengthened the common currency in the early European deals, and, as of now, the pair has been seeing uncertainty in direction. If the pair continues upwards, 1.6635 can likely be a level of resistance in the near term.
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posted by Kalin Tasev @ 2:44 AM
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