Euro Up but Spain Auction Weighs

By: Barbara Zigah

The Japanese Yen weakened in Asian trading, falling against the U.S. Dollar by 0.3% to 81.50 Yen, the lowest level in more than a week, and analysts point out that when the greenback was trading near 80 Japanese Yen earlier in the week, it rebounded solidly above 81 Yen, underscoring for many its underlying strength. Resistance is seen at 81.87 Yen first, and then 82.24 Yen.

Commodity linked currencies got a brief lift from a statement issued on China’s state media which said that the Peoples Bank of China would increased the supply of liquidity “at an appropriate time.” The Australian Dollar rose 0.3% against the Japanese Yen to trade at 84.45 Yen, and another 0.3% rise against the U.S. Dollar to trade at $1.0388, a session high, before settling back to trade around $1.0362.

In the Eurozone, the focus will turn to Spain and the next auction of Spanish 2-year and 10-year. Analysts says that the Euro is likely to be under renewed pressure as the auction looms, and could test support at $1.30. The EUR/USD pair was recently trading at $1.3122, up from a low of $1.3058 struck during the overnight hours in N.Y. trading, but resistance against further advances is likely seen at 1.3213.