Euro dips in Asia

The euro dipped on Tuesday, its trend seen weak despite a rebound from a four-year trough, with investor jitters persisting over the eurozone's fiscal woes and concerns that austerity steps could hurt the region's growth. The single currency edged lower, giving back some of the gains it made the previous day on short-covering. News that the Senate had voted for the US government to oppose International Monetary Fund bailout packages to countries unlikely to repay them weighed on the euro.
That caused market players to fret about the potential impact on any future IMF measures to help ease the eurozone's debt crisis and prompted some euro selling, although there was uncertainty about how much impact the Senate decision would have. The United States is the IMF's largest contributor and has veto power to block decisions, but has never used it. The Senate vote may be just a political gesture, said Koji Fukaya, a senior currency strategist at Deutsche Securities.
The euro slipped 0.5 percent to $1.2333 but remained above its four-year trough of $1.2234 struck on Monday on trading platform EBS. The euro fell 0.7 percent against the yen to 114.04 yen, heading back towards an eight-year low of 110.49 yen struck earlier this month on EBS.
Traders cited talk of active selling of sterling by a European bank. Such flows helped push sterling down 0.5 percent against the dollar to $1.4416, also helping drag the euro lower against the dollar, they said. US Commodity Futures Trading Commission data released last week showed currency speculators boosted net short positions in the euro to a record high in the week ended May 11.
One upside target in the near term may be $1.2445, a 61.8 percent retracement of its fall from Friday's high near $1.2575 to Monday's four-year low of $1.2234. On the downside, the next key support for the euro lies near $1.2135, a 50 percent retracement of a rally from all-time lows near 82 US cents to record highs just above $1.60. The Australian dollar fell 0.6 percent to $0.8716.