Choppy Trade Eases for Euro and Yen

On the final trading day of the week in Asia both the Euro and the Japanese Yen steadied earlier after experiencing major movements earlier in the week which have played havoc on commodity linked currencies; the Australian Dollar is poised to suffer a large weekly drop as a result having already fallen nearly 2% against the greenback this week. Global growth worries had initially been spurred by unexpectedly dismal data from China that resulted in a sharp drop in commodities and risk aversion took hold over the course of the week as more disappointing data came in first from the Eurozone and then yesterday from the U.S. which further suggested moderating growth.

As reported at 9:48 a.m. (JST) in Tokyo, the EUR/USD pair was trading at $1.3056, not too far from late trading in New York; for the week, the Euro is down nearly 0.5% and is well off Tuesday’s 7-week peak of $1.3200. Support for the common currency was seen late in the week by Thursday’s Spanish debt auction which had solid demand and tended to offset the uncertainty resulting from Italy’s political woes. Any gains in the Euro are likely to be limited as investors await PMI and IFO data from the Eurozone, and with a possible interest rate cut by the European Central Bank. Meanwhile, the USD/JPY pair still has been unable to breach the 100.00 level and was trading recently at 98.23 Yen while the EUR/JPY pair came off of last week’s 3-year high to trade at 128.24 Yen.