By: Barbara Zigah

The Euro’s brief rally is firmly over, with investors concerns over the Eurozone’s debt crisis resurfacing and weighing on the common currency. Lackluster demand at the Italian bond auction – the largest in the Eurozone – brought investor worries to the fore, with concerns that debt problems in the Eurozone’s 3rd largest economy may be escalating. Adding to investor worries was the EMU consumer sentiment report which was released yesterday and which showed that consumer confidence in the economy was well below what analysts had expected.

The U.S. Dollar also found itself under pressure following yesterday’s release of the Federal Reserve’s most recent FOMC meeting minutes, which gave rise to expectations of additional stimulus. Both currencies fell against the safe-haven Japanese Yen, which is being bought primarily by Japanese exporters to settle their accounts on this, the last day of the month.

As reported at 2:45 p.m. (JST) in Tokyo, the Euro was trading against the greenback at $1.4435, struggling to find its footing after a decline of 0.5% yesterday. The U.S. Dollar slipped against the Japanese Yen to 76.57 Yen, a drop of 0.2% and not far off the 75.941 Japanese Yen record high which was struck earlier this month on the EBS trading platform. Meanwhile the Euro fell 0.3% against the Yen, to trade at 110.53 Yen.