The Euro steadied against the U.S. Dollar during the Asian trading session, but any potential gains are likely to be capped as new bailout related events unfold in Spain, bringing investors concerns to the fore. The Spanish government is set to announce additional austerity measures tomorrow, which has heated up the animosity levels among the Spanish population who yesterday clashed with police in the country’s capital. The main concern is Madrid’s hesitancy to officially ask the Troika for bailout assistance; furthermore, the European Central Bank is poised to offer the Spanish government the unlimited sovereign bond purchases they need in order to curtail their borrowing costs but they cannot do it without an express request from the government.
As reported at 1:43 p.m. (JST) in Tokyo, the EUR/USD was trading at $1.2899, close to Tuesday’s low and down nearly 2% from the 4-month peak struck last week. Analyst say that support for the EUR/USD pair is seen at around $1.28 but once breached it is likely that the pair will fall toward $1.25. The Euro was also steady against the safe haven Yen, trading at 100.31 Yen, but analysts caution that any additional pressure on the Euro could send the EUR/JPY pair below 100.00 in the near term.