By: Barbara Zigah

In Asian trading, the Euro slipped further against the U.S. Dollar, indeed falling against most currencies, as investors trade cautiously in the day ahead of an ECB policy meeting and a Spanish bond auction. As reported at 10:51 am (JST) in Tokyo, the Euro was trading against the greenback at $1.2747 a 0.2% decline from late trading in N.Y., recovering from a 16-month low of $1.2666 which was established on Monday on the EBS trading platform. Against the safe haven Japanese Yen, the Euro slipped to 98.02 Yen, a 0.2% drop and close to the decade-long low struck on Monday.

The common currency is also trading lower against commodity-linked currencies, and held close to a record low against the Australian Dollar when it traded at A$1.2355 yesterday. Likewise, against the New Zealand Dollar the Euro struck a new record, trading at NZ$.6015 and struck a 1-year low versus the Canadian Dollar yesterday when it hit C$1.2355. One analyst from Paris said that he believes that commodity-linked currencies will continue to out-perform, given that the ECB has been playing an enhanced role in sustaining liquidity in the market. Recent speculation that China is likely to ease monetary policy further is also helping to fuel the Aussie and Kiwi, which are key beneficiaries of a strong Chinese growth policy.