By: Barbara Zigah

In Asian trading, the Euro steadied following a strong response to the Spanish and Italian debt auctions held yesterday and analysts suggest further that the Euro may now be stabilizing against the Australian Dollar. The Spanish debt auction had better than expected demand, with twice as much sold as had been planned; Italy’s auction of 1-year debt was also shown to have strong demand and acceptable yields, giving rise to expectations that today’s auction of longer-dated sovereign debt might also be well attended. As reported at 12:19 p.m. (JST) in Tokyo, the Euro was trading against the U.S. Dollar at $1.2819, a gain of 0.8% and well off the 16-month low struck earlier this week. Resistance is pegged near $1.2860.

The Euro also rose 0.2% against the Aussie, trading at A$1.2428 and coming off A$1.2291, a record low that was struck yesterday. Traders expect the Euro might see a near-term reprieve given that momentum is in its favor. Resistance could come at A$1.2690, which is the 21-day moving average.

Yesterday, the ECB announced it would keep its benchmark lending rates unchanged, and would wait to see if the policy changes it recently made were working before deciding on a further course of action.