By: Barbara Zigah
With commodity prices beginning to stabilize, the Euro has been holding tight to recent gains during Asian trade. Some traders expect the Euro to come under renewed pressure, however, if and when more negative news on the Eurozone’s escalating fiscal troubles arrives. As reported at 2:00 p.m. (JST) in Tokyo, the Euro was slightly lower against the U.S. Dollar, trading at $1.4392, a decline of 0.1% in the day’s trading but well off the low of $1.4254 struck Monday.
The release earlier of Chinese data on retail sales and industrial production, both below analysts’ expectations, pushed risk sensitive currencies lower, with the Australian Dollar and the Euro falling briefly before recovering. That recovery bolstered the Aussie, which was trading at $1.0860 against the greenback, a rise of 0.2% during the trading session.
The Euro did receive some support yesterday when the media reported that another bailout plan for Greece was in the works; while the government denied the claim, most investors recognize that the options available to Greece are limited and a new aid package is the lesser of all evils, considering that other options include debt restructuring or the exit from the Eurozone which many believe could be devastating for the Eurozone economy in the long run.