Forex Asia Review – Euro steady; EU Summit in focus

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Forex Asia Review - Euro temporarily retreats from recent losses; Euro debt woes still persistEuro eased back in the Asian session after a strong rally against the dollar in New York trading when it was boosted by optimism ahead of the European Union Summit on Wednesday. EU leaders are expected to discuss measures to promote growth in Europe and ways to keep Greece in the euro zone. Markets will be looking for change of policy stance.

EURUSD opened Asia at 1.2815 after earlier hitting a high of 1.2823. The single currency still kept some distance from a four-month low reached on Friday but concerns about Spain and Greece keep it under pressure.

Sterling tracked the euro and also benefitted from improved market sentiment. GBPUSD rallied to 1.5840 in the US session before taking a pause in Asia, ahead of some key UK inflation data due later today.

The yen showed limited action ahead of a two-day Bank of Japan policy meeting with results due on Wednesday. It is expected that the BOJ will take further steps to stimulate growth and this would usually weaken yen. EURJPY edged higher for the third day hitting 101.75 in Asia, while USJPY reached 79.46.

The Australian dollar rallied along with other risk currencies in the US session and consolidated those gains during Asia. AUDUSD hovered between 0.9919 and 0.9888. However, the corrective bounce may be short lived if matters worsen regarding Greece.