By: Barbara Zigah

Investors are betting that policymakers in the Eurozone will view the Greek economy as too important to their own survival to allow it to fail, which allowed the Euro cling to hold onto recent small gains in the early Asian trading hours. As reported at 12:47 p.m. (JST) in Tokyo, the Euro was trading higher against the U.S. Dollar, at $1.4332, a gain of 0.2% but off of the session high of $1.4385. Resistance is seen at 41.4413, the Euro’s 55-day moving average and $1.4451, the June 15th high.

One foreign bond manager in Tokyo noted that all of the Euro’s gains are being driven by short-term market players, as no one is willing to hold onto the common currency for the long term given the degree of uncertainty there. As has been in the past, the Euro is finding support from the rate differential between the U.S. Federal Reserve and the European Central Bank.

The credit ratings agency, Fitch, has also thrown another monkey wrench into the resolution of the Greek debt situation. In a recent letter, the agency said that they would view as default any debt swap or, for that matter, even the voluntary rolling over of maturing debt, and would react accordingly.