Euro Steadies but Remains on Defensive

By: Barbara Zigah

The common currency Euro held steady against the U.S. Dollar and edged higher versus the Australian Dollar in Asian trading. Analysts believe the Euro will likely remain on the defensive however; as reported at 11:52 a.m. (JST) in Tokyo, the Euro-Dollar was trading at $1.3308, close the 1-week trough of $1.3280 which was struck yesterday. Against the Aussie Dollar, the Euro rose 0.2% to trade at A$1.2333, following the 1½ week low struck earlier in the session. One currency strategist believes that this week’s injection of €530 billion will have the risk-on crowd moving into short Euro cross positions. The only barrier that could weigh on higher risk assets is the recent oil price increases which might hamper global growth.

The Japanese Yen resumes its move to edge lower against the U.S. Dollar, with the USD/JPY pair trading at 81.40 Yen and close to a 9-month peak struck earlier in the week on the EBS trading platform. The testimony of Federal Reserve Chairman Ben Bernanke on Wednesday helped gave the Dollar’s rise a pause, as markets were more than surprised that the Fed chief did not once speak of the possibility of another round of quantitative easing.