By: DailyForex.com
As the trading week begins in Asia the Euro continues to be under pressure and dipped lower against the U.S. Dollar as market players insist on getting some clarity in the Spain bailout situation. Traders are waiting for Spain to request an official bailout which will be needed in order to break out of the tight trading range of $1.2800 and $1.3100 which it has been trading in since mid-September. Market players had been hopeful that the Spanish government would have made an official request this past weekend, which would trigger the ECB’s bond purchase program, and lower Spain’s borrowing costs.
As reported at 1:34 p.m. (JST) in Tokyo, the EUR/USD pair was trading at $1.2899, a loss of 0.4% and off the earlier low of $1.2891. Support is seen near the 200-day moving average at $1.2825.
Commodity-linked currencies were also lower against the U.S. Dollar, with the Aussie Dollar slipping 0.3% against the greenback to trade at $1.0216. One analyst in Singapore says that the risk-off sentiment is being triggered by Spain and to a lesser extent by a prevalent weakness in Asian equities but even better than expected data from China couldn’t help improve sentiment. Over the weekend, data showed that Chinese exports and imports improved, while Chinese inflation data released earlier today was in line with expectations.