The euro edged to a 15-month high against the dollar while the yen slipped broadly on Wednesday as a bout of global risk reduction abated and investors sought currencies promising higher yield. The euro was lifted by reported demand from sovereign names looking to recycle dollar proceeds as the single currency remained supported by the prospect of further rate rises in the eurozone while policy stays loose in the United States and Japan.
The euro was up 0.1 percent at $1.4506, having earlier hit $1.4521 on EBS trading platform, narrowly surpassing Tuesday's $1.4520 high. Its gains were slowed by persistent option-related offers. Traders said a barrier at $1.4530 was being defended, expiring on Friday. A break above there would target the 2010 highs around $1.4582. Against the yen, the euro was up 0.7 percent on the day at 121.91 yen, though it stayed well below an 11-month high of 123.33 yen hit on Monday.
The yen's downtrend was seen staying intact as long as risk appetite holds up. The negative impact on the economy of the recent massive earthquake was expected to ensure Japanese monetary policy remains ultra-loose for a prolonged period. The Japanese government's downgrading of its assessment of the economy for the first time in six months added weight to this view. The dollar was up 0.5 percent at 84.07 yen after sliding more than 1.2 percent on Tuesday for its biggest one-day percentage drop in four months.
The dollar continued to be supported by its 200-day moving average - currently around 83.46 yen - having bounced off that level on Tuesday. More support lies at 83.34 yen, the 23.6 percent retracement of the dollar's mid-March to April rally, and 83.30 yen, the dollar's March 11 intraday high. The Australian dollar was up 0.5 percent at $1.0493 to come closer to its recent 29-year high of $1.0585.
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