Forex Asia Review – Euro, Australian dollar decline on renewed eurozone debt fears

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The euro eased off slightly in Asia against the dollar after climbing in the prior session when market jitters were calmed following a joint statement from German and French leaders after a conference call expressing their support for Greece and that it should stay in the European monetary union. The initial relief soon faded in the Asian session as investors are still wary of how Greece will avoid a default. Speculation is growing that Moody’s might downgrade its rating on Italian debt soon. Meanwhile later today, the focus will be on Spanish bond auction. EURUSD opened Asia at 1.3752 an closed down at 1.3708.
GBPUSD was volatile in the session. After opening Asia at 1.5762 and extended the decline to 1.5726 as the euphoria quickly wore off from better than expected UK claimant count data yesterday. Cable closed down at 1.5758.Meanwhile further economic data on retails sales with expectations not looking so good, could further weigh on the pound.

 

The Australian dollar sank to near Wednesday’s one-month low versus its U.S. counterpart on concerns that the euro zone debt crisis is deepening despite efforts by German and French leaders to calm market nerves following their conference call yesterday. AUDUSD opened Asia at 1.0275 and slid to 1.0185.

 

The Swiss franc was little changed against the euro and the dollar, both pairs remained in an incredibly tight range as a result of the September 6 Swiss National Bank intervention in the currency markets to curb franc strength and introduced a ceiling of 1.20CHF against the euro.

 

USDJPY opened Asia at 76.58 which was the two week low reached I the earlier session and soon jumped higher after large buy orders by large firms looking to profit from the lower dollar which weakened after poor US retail sales data. USDJPY manage to climb to 76.79 before easing off again to 76.62. EURJPY remains trapped in a range that began on Monday and which is tightening. Key resistance remains below 105.60, and the pair remained above 105.08.

 

Gold extended its decline in Asia as market sentiment improved when European leaders gave optimism that they support Greece and will make efforts to contain the euro zone debt crisis. This removed the precious metal’s safe-haven appeal. Spot gold fell to a low of $1,804.22 from an early Asian session high of $1,826.55.