Reuters: US Dollar Report: FOREX-Euro holds most of its ground around 7-week highs

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FOREX-Euro holds most of its ground around 7-week highs Aug 22nd 2012, 06:55 Wed Aug 22, 2012 2:55am EDT * Euro/yen in daily Ichimoku cloud for first time since May * Euro rises to 6-week high against Aussie * Yen shrugs off downbeat Japanese trade data By Lisa Twaronite TOKYO, Aug 22 (Reuters) - The euro was steady in Asian trading on Wednesday, holding close to seven-week highs hit in the previous session as investors held on to expectations that European policymakers will take action to stem the region's debt crisis. Hopes have been building in recent weeks that the European Central Bank's next policy meeting on Sept. 6 will lead to action that would help to lower Spanish and Italian bond yields as well as keep Greece afloat and in the euro zone. Greek Prime Minister Antonis Samaras will meet German Chancellor Angela Merkel, French President Francois Hollande and Eurogroup chief Jean-Claude Juncker in coming days. A British newspaper report on Tuesday supported a weekend German report that the ECB plans to help Spain and Italy reduce their high public debt. "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. OPTIONS BARRIER The euro changed hands at $1.2461, 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 98.80 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 base provides downside support. The dollar was nearly flat against the yen at 79.28 yen , down 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 a slower-growing China declined. The Australian dollar was down about 0.4 percent against the greenback, buying $1.0440, but holding above a three-week low of $1.0411 hit late last week. The Aussie also lost ground against the euro,, which rose 0.3 percent to A$1.1926, after hitting a six-week high of A$1.1949 earlier on Wednesday. But the Aussie remained 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, although the central bank left the door open for more easing if needed. Link this Share this Digg this Email Reprints

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