Reuters: US Dollar Report: CORRECTED-FOREX-Euro holds ground after touching 7-week highs

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CORRECTED-FOREX-Euro holds ground after touching 7-week highs Aug 22nd 2012, 00:25 Tue Aug 21, 2012 8:25pm EDT (Corrects euro level in 6th paragraph to $1.2467, not $1.2367) By Lisa Twaronite TOKYO Aug 22 (Reuters) - The euro was steady in early Asian trading on Wednesday after hitting seven-week highs in the previous session, with investors waiting to see whether European policymakers will take action to stem the region's debt crisis. The European Central Bank will hold its next policy meeting on Sept. 6. In recent weeks, hopes have been building that the meeting will lead to action that would help lower Spanish and Italian bond yields. Greek Prime Minister Antonis Samaras will meet German Chancellor Angela Merkel, French President Francois Hollande and Eurogroup chief Jean-Claude Juncker in the coming days. A British newspaper report on Tuesday also supported a weekend German report that the ECB plans to help Spain and Italy. "While Germany's signals are positive, we believe the optimism on the euro should be pared back, as we continue to expect a weaker euro to be part of any policy mix that manages to bring the EU periphery back from the brink," strategists at Barclays wrote in a note on Wednesday. The euro changed hands at $1.2467, not far from its Tuesday peak of $1.2488 on the EBS trading platform and marking its highest level since July 5. The single currency skidded to a two-year low of $1.2040 less than a month ago, on July 24. Against its Japanese counterpart, the euro bought 98.82 yen , not far from a seven-week high of 99.18 yen hit on Tuesday. The euro's rally against the yen brought it into its daily Ichimoku cloud for the first time since it broke below the cloud in early May. The cloud's parameters are now 98.27 yen to 100.02 yen, with the base providing downside support. The dollar eased slightly against the yen to 79.29 yen , moving away from a five-week high of 79.66 yen hit on Monday. But since last week it has remained solidly above its 14-day moving average, now at 78.82 yen. The Australian dollar was buying $1.0462, down 0.2 percent, though above a three-week low of $1.0411 hit late last week. The Aussie remains supported after the minutes of the Reserve Bank of Australia's August policy meeting released on Tuesday did not signal any imminent interest rate cut, though the central bank left the door open for more easing later if needed. (Additional reporting by Reuters FX analyst Rick Lloyd in Singapore; Editing by Edwina Gibbs) Link this Share this Digg this Email Reprints

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