Reuters: US Dollar Report: FOREX-Euro steadies after dropping on German data, Spain

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FOREX-Euro steadies after dropping on German data, Spain Sep 25th 2012, 03:28 Mon Sep 24, 2012 11:28pm EDT * Euro support seen at 200-day moving average around $1.2827 * Yen steadies as Azumi reassures he remains vigilant By Lisa Twaronite TOKYO, Sept 25 (Reuters) - The euro steadied in early trade in Asia after falling to a more than one-week low against the dollar overnight as worries about Spain's debt persisted and weak German business data fanned fears of slowing growth. The recently resurgent yen also gave up some ground against the dollar and euro. Some market participants expected it to face continuous upward pressure this week from Japanese repatriation ahead of half-year book-closing, though others said such flows were likely to be thin as many companies had already covered their needs. A drop in German business sentiment to its lowest since early 2010 stoked concerns about a slowdown in the euro zone's largest economy, despite the European Central Bank's recently announced bond-buying plan. Spain also remained in focus, as its government bond yields rose on concerns that the country is dragging its feet in requesting the international bailout that most market participants expect. "Fears about Europe's situation remain among investors, with the focus mostly on Spain, but Greece is also still a concern, after a report its budget deficit is bigger than previously thought," said Kimihiko Tomita, head of foreign exchange for State Street Global Markets in Tokyo. German's Der Spiegel reported the Greek deficit could be 20 billino euros, nearly double previous estimates. "There is no official confirmation of this, but if it turns out to have some truth in it, it would be very bad news, and could put more pressure on the euro," he said. The euro recovered to $1.2944, after falling as low as $1.2891 on Monday, its weakest since Sept 13. The European unit reached what had been a four-month high of $1.3173 on Sept. 17. Support was seen at its 200-day moving average, which is now around $1.2827. Against the yen, the euro rose to 100.77 yen after slipping as low as 100.35 yen on Monday, its lowest level since Sept. 13. The dollar bought 77.85 yen, moving back toward Sept. 14's low of 77.46 yen. Support was said to lie around the 77.60 to 77.70 range. That would mark retracement of the rally from 77.13 yen on Sept. 13 to a one-month high of 79.22 yen on Sept. 19 after the Bank of Japan announced it would further ease monetary policy. PAIN IN SPAIN This week, Spain is expected to unveil new structural reforms and its draft budget plan for 2013. Investors also await results of stress tests on its banking sector. A Moody's credit review of Spain is also expected this week, and the ratings agency could downgrade Spanish debt to junk status, although it has said it would welcome news of an aid request. In Japan, Finance Minister Jun Azumi reassured markets on Tuesday that there would be no vacuum in currency policy due to his pending departure from his post to take a new position next month in the ruling Democratic Party. Azumi told reporters he stands ready to take firm measures on currencies as long as he is finance minister. The Australian dollar rose 0.1 percent to $1.0441, moving back toward a six-month high of $1.0625 set on Sept 14. Link this Share this Digg this Email Reprints

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