Forex Asia Review – EURUSD slips to new four-month low

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Euro extended its  decline against the dollar and yen during the Asian trading session, prompted by the crisis in the euro zone. Concerns over whether  Greece may leave the euro zone have led to contagion fears especially since Spain’s banking system is now fragile. Adding to bearish sentiment, Moody’s ratings agency downgraded sixteen Spanish banks.

 

EURUSD fell to a fresh four-month low of 1.2654.

Meanwhile, EURJPY fell further in Asia to a three-month low of 100.44.

 

Sterling continues to underperform after Wednesday’s dovish Bank of England quarterly inflation report increased the likelihood of more QE. GBPUSD dropped to a two-month low of 1.5735.

 

Yen maintained strength in the Asian session , resulting in the Japanese Finance Minister Azumi to comment that the excessive FX moves are undesirable and he is ready to act if necessary  to curb yen strength. USDJPY plunged over 1 percent on Thursday following disappointing U.S. economic data, reaching a three-month low of 79.12 where it consolidated during the Asian session

 

The Australian dollar fell further against the greenback as weak Asian bourses and soft China housing data dragged on the commodity-linked aussie. AUDUSD slipped to 0.9813, the lowest level since November 2011.