By: Barbara Zigah

In Asian trading, the Euro slipped back from a 3-week peak against the U.S. Dollar which was struck yesterday. The fall was precipitated by news that the Eurozone’s finance ministers have rejected the last offer made by Greece’s private bondholders. As reported at 11:30 a.m. (JST) in Tokyo, the Euro fell to $1.2988 before rebounding to $1.2995; yesterday the EUR/USD pair rose to $1.3035, a gain of more than 1%, on the EBS trading platform. In spite of the pullback, the common currency is well off the 17-month low of $1.2624 which was struck on January 13th; resistance is seen at around $1.3077 and again at $1.3100.

Also coming under pressure was commodity-linked currencies; the Australian dollar slipped 0.3% against the U.S. Dollar to trade at $1.0494, off of the 12-week high of $1.0574 struck overnight.

With the finance minister’s rejection, worries are growing that Portugal may now also be facing a default risk. For the Greek government, officials there must go back to their creditors and rework the proposal.

Yesterday it was reported that German officials had said they were ready to bolster the Eurozone’s EFSF to €750 billion, but that rumor was later quashed by German officials which effectively also helped to pull the rug out from under the Euro-Dollar.