Reuters: US Dollar Report: FOREX-Euro nurses losses; China flash PMI in focus

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FOREX-Euro nurses losses; China flash PMI in focus Mar 22nd 2012, 00:01 Wed Mar 21, 2012 8:01pm EDT By Antoni Slodkowski TOKYO, March 22 (Reuters) - The euro nursed losses in Asia early on Thursday, slipping from a near five-month high on the yen and two-week highs against the greenback after worries over Spain's finances put fresh pressure on peripheral euro zone bonds. The euro was last at $1.3212, having fallen from the overnight high of $1.3286. The euro's rise stalled ahead of resistance at the 61.8 percent retracement of its Feb-March slide at 1.3300. Italian and Spanish debt prices fell on concerns about Spain's slow progress in boosting its finances. The wave of Spanish and Italian bond selling benefited German Bunds , whose yields slipped back below 2 percent for the first time this week. "It's always been hard to talk of any real optimism in the euro zone and the mood there remains extremely fragile," said Teppei Ino, currency strategist at the Bank of Tokyo-Mitsubishi UFJ. "The fire can start spreading out again on the slightest of worries - this time it seems to be affecting the peripheral bond yields. The situation may worsen if the European manufacturing data comes in below forecasts later today," he said. Against the yen, the euro stood at 110.26, down sharply from the previous day's high of 111.43. It too failed to clear an important chart resistance at the post-intervention Oct. 31 high of 111.57. The key focus in Asia is on HSBC's flash report on China's factory activity due at 0230 GMT. Any disappointment in the data could bolster worries about a hard landing in China, already rife after dismal trade figures earlier this year. The Australian dollar, which is sensitve to Chinese data, will be closely watched after the release. It now trades at $1.0452, having tested support around $1.0422 for a second time this month. It has already fallen some 3 percent this month and is well supported at the 200-day moving average of $1.0402 with minor resistance at 1.0470-75 and talk of good selling interest at 1.0500-20. The yen was broadly firmer against the dollar, with the greenback easing to 83.43, off Wednesday's high of 84.10. That said, it was still up 8.3 percent so far this year. Link this Share this Digg this Email Reprints

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