By: DailyForex.com
The Euro moved higher during the Asian trading session, helped along by better than expected manufacturing data form the U.S. which gave risk currencies a slight boost; tempering the Euro’s gains, however, continues to be investor concerns over Spain’s fiscal crisis.
As reported at 12:39 p.m. (JST) in Tokyo, the EUR/USD pair was trading at $1.2901 a gain of 0.1% and off the low of $1.2804 struck on Monday on the EBS trading platform. Investors continue to hope that Spain’s government will make the official request for bailout assistance soon, and analysts concur that that such a proactive request would help the currency substantially, with $1.33 not out of the question. On the other hand, a continued delay and rising borrowing costs back toward 7% are likely to translate into downside risks for the Euro.
The Australian Dollar edged lower to 1.0310 as the Reserve Bank of Australia announced an interest rate cut to 3.25% from 3.50% which was widely expected by a consensus of analysts. The too high Aussie dollar, a sharp drop in export prices and the slowdown in China and others of its export markets had many analysts arguing in favor of more easing.