The Euro was holding close to a 2-week trough against the U.S. Dollar during the Asian trading session as investors’ expectations of a fruitful outcome to the E.U. summit fade.
In Asian trading, the U.S. Dollar extended earlier gains as its appeal as a safe haven status increased as investors’ concerns over the Eurozone crisis and a global slowdown weighed heavily on risk appetite.
The U.S. Dollar steadied close to a 1-week peak against a weighted basket of major currencies finding support ahead of a downgrade by Moody’s of sixteen major global banking firms, including Citibank, JP Morgan and Deutsche Bank.
In Asian trading, the U.S. Dollar stayed above a 1-month trough against a weighted basket of major currencies despite the announcement from the Federal Reserve yesterday that they would extend the Operation Twist program and would consider additional easing if economic conditions warranted.
In Asian trading, the Euro slipped against the U.S. Dollar but managed to hold onto the majority of gains made on Tuesday. Investors’ focus is squarely on Washington, D.C. and the U.S. Federal Reserve where the FOMC will be making an interest rate decision later today.
The Euro’s typical volatility was clearly in evidence as investors put any lingering relief over Sunday’s Greek pro-bailout vote to rest and focused instead on Spain, where a debt auction of 10-year benchmark bonds saw yields rise to 7.3%.
Relieved investors helped to give the common currency a boost which briefly struck a 1-month peak against the greenback following the election outcome in Greece which supports the Euro.
The Euro edged higher in Asian trading as investors have pinned their hopes on central banks to contain potential repercussions that could arise from the outcome of Sunday’s Greek election.
Following a short-lived rally, the Euro’s gains have been capped as investors await an Italian sovereign debt auction which will be held later today; there is a growing concern among investors that the third largest economy in the Eurozone may need some external support.
The Euro moved lower but remained range-bound during the Asian trading session, as investors hold their positions ahead of the upcoming Italian sovereign debt sale and this weekend’s critical Greek vote, the latter of which will likely shape the Eurozone’s future.
The EU may have voted to inject up to 100 billion euros into Spanish banks, but the increase in Spanish and Italian bond yields on Monday indicates that investors still doubt the success of the Spanish bailout plan.
Analysts say that the Euro could see its single largest daily rally today as investors’ relief over Spain’s request for assistance to aid its banking sector grows as markets in Europe and then North America open later today.
Thursday ended up being a disappointment for investors who were awaiting word from Fed Chairman Ben Bernanke that they intended to provide additional stimulus to shore up an economic recovery that was in danger of losing its momentum.
The Euro continued to firm against the U.S. Dollar in Asian trading on Thursday, boosted by growing hopes of a more accommodative bias from some members of the European Central Bank and the U.S. Federal Reserve suggesting that the central banks might provide additional stimulus in the months to come.
The Euro continued to mark small gains as investors’ risk appetite increased following the earlier report of unexpectedly good Australian growth Nonetheless, Euro-Dollar traders remain wary ahead of tomorrow’s meeting of the European Central Bank’s policy setting committee.