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

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FOREX-Euro holds ground after touching 7-week highs Aug 22nd 2012, 03:30 Tue Aug 21, 2012 11:30pm EDT * Euro/yen in daily Ichimoku cloud for first time since May * Yen shrugs off downbeat Japanese trade data By Lisa Twaronite TOKYO, Aug 22 (Reuters) - The euro was steady in 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 as well as keep Greece on lifelines. 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 to help reduce their high public debts. "The euro has risen not on action but on expectations, about what the ECB could do, but it remains to be seen if these expectations are followed up with action," said Masashi Murata, senior currency strategist at Brown Brothers Harriman in Tokyo. "We don't know how long these expectations can keep pushing up the euro, and in the meantime, it remains vulnerable to any bad news," Murata said. The euro changed hands at $1.2464, 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. On the upside, market participants cited an options barrier at $1.2500, part of which was a double no-touch option with the other strike at $1.2000. Against its Japanese counterpart, the euro bought 98.75 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 79.24 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 yen shrugged off data showing Japan's exports slumped the most in six months in July as sales to a debt-ridden Europe and China dropped. The Australian dollar was down about 0.3 percent against the greenback, buying $1.0453, though holding 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. Link this Share this Digg this Email Reprints

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