Reuters: US Dollar Report: FOREX-Euro edges higher ahead of Irish vote

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FOREX-Euro edges higher ahead of Irish vote May 31st 2012, 13:30 Tweet Share this Email Print Thu May 31, 2012 9:30am EDT * Euro stabilizes around $1.24; off near 2-year lows * An Irish 'yes' vote could provide only a brief reprieve * Trend remains for further falls in the euro By Wanfeng Zhou NEW YORK, May 31 (Reuters) - The euro edged higher from an almost two-year low against the dollar on Thursday on expectations of an Irish vote in favor of Europe's fiscal pact, but gains could be fleeting as worries about Spain's debt troubles persist. Extreme positioning may have also helped the euro zone common currency stabilize after a fall of more than 6 percent in May, putting it on track for its worst month since September, 2011. Ireland began casting ballots in the only popular vote on Europe's new fiscal treaty on Thursday, with opinion polls pointing to a 'yes' vote that could ease concerns about its funding prospects. "The euro is getting a little support ahead of this Irish vote and just overall profit-taking," said John Doyle, senior strategist at Tempus Consulting in Washington. "But if you take a step back and look at it from a more medium-term point of view, this isn't the reason to buy the euro and I think it's going to go down and test the $1.2350 level, if not tomorrow, early next week." The euro fell as low as $1.2356 on Reuters data, the weakest since the beginning of July 2010. Traders cited sell orders above $1.2430 and some speculators selling into the bounce. It was last at $1.2396, up 0.2 percent on the day. In Greece, a new poll showing a pro-bailout conservative party ahead of the anti-bailout far left in the run-up to a parliamentary vote also helped the euro. The dollar fell 0.6 percent to 78.59 yen, hitting a session low after a slew of data highlighted the fragile nature of the U.S. economic recovery. New U.S. claims for unemployment benefits rose last week for the fourth straight week, while first-quarter growth was revised lower. A separate report showed U.S. employment increased by 133,000 private sector jobs in May, below expectations. Analysts at Action Economics said "there is evidence that U.S. macro names may be gearing up for a downside break, with the 200-day moving average and option barriers in sight at 78.60 and 78.50, respectively." The euro slipped 0.4 percent to 97.43 yen, having dropped to its lowest in more than four months at 97.28 yen. Tweet this Link this Share this Digg this Email Reprints Comments (0) Be the first to comment on reuters.com. Add yours using the box above.

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