Asian markets were subdued as investors are taking a cautious tone amid concerns over European growth and uncertainty about the implementation of Greece’s debt deal. Lack of economic data in the Asian session kept markets quiet.
EURUSD remains trapped in a range trading between 1.3280 and 1.3290 since the approval of the Greek bailout deal. There is uncertainty over the implementation of the debt plan and Fitch Ratings further dampened sentiment by downgrading Greece on Wednesday. The focus turns to Germany’s IFO business sentiment survey for February due at 0900 GMT, and the euro may get a lift if the data turns out to be strong.
Overall global growth concerns are keeping sentiment low following weak PMI data from Europe and China yesterday. The Euro zone PMI for February fell short of forecasts and below 50, which is a contraction phase. The disappointing data followed a preliminary HSBC PMI reading in China that was slightly improved from January but still below 50.
The dollar slipped against the yen in Asian trading as investors took profits on gains but the greenback is likely to resume its rise given continuing yen selling. USDJPY dipped to 80.06. On Wednesday the pair hit a seven-month high of 80.39. The Japanese currency has been declining every day against the dollar since February 14, when the Bank of Japan announced quantitative easing to stimulate Japan’s economy by adding 10 trillion yen to its asset-buying program.
The Australian dollar was dragged down by political tensions. The aussie fell after the resignation of Foreign Minister Kevin Rudd. Prime Minister Julia Gillard called a leadership ballot in an effort to end months of building tension within the Labor government over who will lead it into the 2013 election. AUDUSD touched a session low of 1.0596, the lowest since February 1st.