Forex News – AUD boosted by upgrade in Fitch rating; euro steady ahead of Ecofin

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Euro was calm in Asian trading as investors are being cautious ahead of the meeting of European finance ministers today and on Wednesday. The single currency will remain vulnerable to headlines from the Eurogroup meetings over the next couple of days will take precedence in driving the market’s momentum. Sentiment was buoyed in Asia, with equity markets up across the region amid rising hopes of progress in resolving the euro zone debt problem. Japan’s Nikkei Average ended up 2.3 percent up at 8,477.82. EURUSD closed up at 1.3364 from the open of 1.3319.

 

The dollar remains weak as upbeat sentiment lessened demand for the safe haven. The dollar index which measures the performance of the greenback against a basket of six major currencies, fell to 79.094, from 79.236 in North American trading late Monday.

 

The British pound opened in Asia at 1.5508 and closed up at 1.5527. Recently cable has been taking direction from the EUROUSD pair and remains buoyed by optimism that European officials are moving toward closer fiscal union which helps in tacking the debt crisis.

 

Against the yen, the dollar hit a high of 78.27, the highest level since the beginning of the month. Japan’s unemployment rate surged by more than forecast 4.5 percent in October from 4.1 percent in September, as the global slowdown is hitting the Japanese economy as well.

 

The Australian dollar climbed higher against the dollar, boosted by an upgrade to Australia’s long-term foreign currency rating by Fitch. Further helping perceptions of Australia and its currency, the OECD forecast in its global economic outlook that Australia would be the one of the fastest growing economies in the world in 2012. AUDUSD gained 1.13 percent to rise to 0.9862 from a low of 0.9974.

 

The New Zealand dollar traded slightly higher in Asia, buoyed by strength in both local and offshore equity markets. NZDUSD hit a high of 0.7587 from 0.7510. The kiwi has been holding firm since Monday after news that Prime Minister John Key was re-elected over the weekend. This will strengthen his government push for free-market policies.