Reuters: US Dollar Report: FOREX-Euro slips slightly but seen supported ahead of ECB

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FOREX-Euro slips slightly but seen supported ahead of ECB Sep 5th 2012, 03:37 Tue Sep 4, 2012 11:37pm EDT * Euro stop-loss orders said to lie below $1.2475 * Aussie skids to 6-week low on China slowdown fears By Lisa Twaronite TOKYO, Sep 5 (Reuters) - The euro dipped slightly against the dollar in Asian trading on Wednesday, but underlying support for the single currency stayed intact ahead of a European Central Bank meeting on Thursday that is expected to unveil details of a long-awaited debt-buying plan. The European unit percent was down 0.2 percent at $1.2537 , off its Tuesday session high of $1.2629 but still not far from Friday's high of $1.26378 on trading platform EBS, which was its strongest level since early July. In early Asian trading, the euro bumped through stop-loss orders which were said to have been placed at $1.2550, which was a 50 percent retracement of its recent rise from $1.2465 on Aug. 28 to Friday's high, as well as at Tuesday's low of $1.2555. Further stops were said to lie below $1.2475. "The euro is finding the going a little bit easier. The prospect of the collapse of the euro is becoming a distant memory with many former bears. And the temperature seems to be rising amongst the perma bears," said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co. ECB President Mario Draghi told European lawmakers on Monday that purchases of short-term sovereign bonds to help debt-burdened countries like Spain and Italy would not breach European Union rules, according to a recording obtained by Reuters. The euro "is rangebound but seems to be quite well supported. The high expectations for the ECB meeting on Thursday remain after Draghi's closed-door meeting on Monday," Wilkinson said. Still, fears that the ECB could disappoint and trigger a further euro correction prompted some investors to take profits on its recent gains. "Some investors are wary that the euro's rally ahead of the ECB meeting will turn out to be, 'buy the rumour, sell the fact," with so many key details of the debt-buying plan still unclear, such as volume," said Kimihiko Tomita, head of foreign exchange for State Street Global Markets in Tokyo. The euro also slipped slightly against the yen, down 0.2 percent to 98.33 yen. The euro also came under some pressure on Tuesday after worse-than-expected data on U.S. manufacturing gave the dollar a safe-haven lift. The key U.S. data this week will come on Friday, when the monthly employment report is expected to show employers increased payrolls by 125,000 workers last month, down from July's 163,000. The dollar was steady against its Japanese counterpart at 78.43 yen. The Australian dollar recovered to $1.0209 after dropping to a six-week low of $1.0189 on growing speculation the Reserve Bank of Australia will cut interest rates to cushion the economy from falling commodity prices. Government data on Wednesday showed Australia's gross domestic product rose 0.6 percent in the second quarter, at a slower pace from the previous quarter when it jumped 1.4 percent. Australia's central bank held rates steady on Tuesday as widely expected, though a slowdown in China has left the country's commodity-fuelled economy vulnerable. Link this Share this Digg this Email Reprints

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