Reuters: US Dollar Report: FOREX-Euro, yen steady after large swings, AUD on track for big weekly fall

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FOREX-Euro, yen steady after large swings, AUD on track for big weekly fall Apr 19th 2013, 00:15 Thu Apr 18, 2013 8:15pm EDT * Major currencies in directionless trade overnight * Aussie on track for biggest weekly fall in nearly a year * Global growth worries, slump in commodity prices weigh By Ian Chua SYDNEY, April 19 (Reuters) - The euro and yen started trade in Asia on Friday in familiar territory having steadied from wild swings in a week that took a heavy toll on commodity currencies such as the Australian dollar. Trading overnight was uneventful with some dealers describing it as cautious consolidation after a week driven by renewed worries about global growth and a sharp slide in commodity prices, which hit risk sentiment hard. More soft U.S. data on Thursday, including cooling factory activity in the nation's Mid-Atlantic region in April, provided further evidence of a moderation in growth, adding to a string of disappointing economic reports from China and Germany. The euro stood at $1.3056, little changed from late New York and Tokyo levels on Thursday. But it was on track to end the week down 0.5 percent, well off a seven-week high near $1.3200 reached on Tuesday. Traders said solid demand for Spanish government bonds at an auction on Thursday helped support the common currency, but that was offset by ongoing political uncertainty in Italy. "The cloud of ECB rate cut expectations also continues to hang over the euro and could be reinforced by next week's weaker 'flash' PMI estimates and Germany's Ifo survey," said Vassili Serebriakov, strategist at BNP Paribas. Earlier in the week, European Central Bank Governing Council member Jens Weidmann was quoted by the Wall Street Journal as saying the bank could ease policy further if economic data warrants it. "Nevertheless, we expect these to remain temporary setbacks for the euro. The overall trend in the euro zone risk premia appears to be lower rather than higher, while an ECB rate cut would still fall well short of the aggressive balance sheet expansion by the Fed and the BOJ," BNP's Serebriakov added. Japan's radical reflationary policies unveiled earlier this month weighed heavily on the yen, although renewed concerns about global growth this week prompted many investors to pare bearish positions in the Japanese currency. That has seen the dollar retreat from a four-year peak near 100 yen set last week to 98.23. The euro fetched 128.24 yen, also down from a three-year peak of 131.10 scaled last week. Global policymakers are gathered in Washington for a Group of 20 nations meeting and will discuss the impact of unprecedented monetary policy easing that have fanned tensions over currency wars. They are expected to confirm a February pledge to avoid competitive currency devaluations, officials have said. Among the biggest losers this week are commodity currencies such as the Australian dollar, which had been stung by worries about growth in China, Australia's single biggest export market. The Aussie last stood at $1.0294, little changed from late local levels, but well off a three-month high near $1.0600 set last week. It was down about 2 percent so far this week, on track for its biggest weekly fall in 11 months. There is little in the way of major economic news out of Asia on Friday, leaving the focus squarely on the G20 meeting. Link this Share this Digg this Email Reprints

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