By: Barbara Zigah

Short covering helped to push the Euro pushed higher during the Asian trading session as higher risk assets gained support following news that China’s economy slowed less than previously expected in the last quarter of 2011. As reported at 12:03 p.m. (JST), the Euro had gained 0.5% against the U.S. Dollar, trading at $1.2729 and pulling further from the 17-month trough struck on the EBS trading platform last week. The common currency also moved higher against the safe haven Japanese Yen, trading up 0.4% to 97.63 Japanese Yen. One trader in Tokyo said that too much shouldn’t be made of the Euro’s rise, which was merely the collective reflection of investors’ short-covering positioning, he believes the downward trend remains intact.

The Euro and other commodity-linked currencies such as the Australian Dollar gained on the Chinese economic data. The National Bureau of Statistics reported that the 4th quarter growth was 8.9% annualized, and confirmed that that growth was the slowest pace in more than 2 years; analysts had expected a reading of 8.7%, however. With the news the Australian Dollar surged 0.7% against the U.S. Dollar, trading to $1.0386, and against the Japanese Yen gained 0.6% to trade at 79.65 Japanese Yen.