Euro broadly higher in Asia

15 Apr, 2015

The euro brushed a fresh two-year low against a broadly firmer yen on Tuesday, as the Japanese currency doggedly held on to gains made in the previous session. Analysts and market participants said the trigger for investors to unwind their bearish yen positions overnight was comments from Koichi Hamada, an economic adviser to Japan's Prime Minister Shinzo Abe. Hamada told a TV programme on Monday that the yen's current level of around 120 per dollar is very weak.
Japanese Economics Minister Akira Amari said on Tuesday he will not comment on foreign exchange levels.
"Comments like this get attention when there's nothing else to trade on - particularly yesterday, when there were no big economic releases," said Bart Wakabayashi, head of forex at State Street in Tokyo. "But I don't see any reason for the euro to be supported."
The euro was down about 0.4 percent at 126.48 yen, after breaking below the overnight low of 126.505 yen to 126.440, reaching levels not seen since June 2013.
The dollar was down 0.2 percent on the day at 119.89 yen, after it slid as far as 119.68 yen on Monday from its session high of 120.845.
The yen's rebound also came after the Bank of Japan on Monday signalled that the benefits of its stimulus programme were broadening, dampening speculation of more easing in the near term.
The euro has fallen for six straight sessions, and was last down about 0.2 percent on the day at $1.0549, moving back toward its overnight low of $1.0520 and a 12-year trough of $1.0457 plumbed last month.
Also weighing on the common currency was a Financial Times report that Athens was preparing for a debt default if it did not reach a deal with its creditors by the end of the month. Greece denied the report, saying negotiations were proceeding "swiftly".
Weakness in the euro helped lift the dollar index to a one-month high of 99.990 overnight. It last stood at 99.599, up about 0.1 percent on the day.
Sterling slipped about 0.1 percent to $1.4656 but remained above a five-year low of $1.4567 hit on Monday, as investors made bets after an opinion poll showed the ruling Conservative Party pulling ahead of the opposition Labour Party just three weeks before Britain's May 7 general election.
In Asia, the Singapore dollar rallied after the country's central bank surprised markets by keeping monetary policy settings unchanged. It rose as high as 1.3597 and was last trading at 1.3634 versus the US dollar, which was down about 0.6 percent on the day.
The Australian and New Zealand dollars modestly trimmed losses after Singapore's decision, triggering a broad pullback in long US dollar positions.
Both currencies had skidded on Monday after Chinese trade figures rekindled worries about slowing growth in their biggest export market.
The Aussie edged up about 0.1 percent to $0.7594, after shedding 1.2 percent in the previous session toward a six-year trough of $0.7530 set earlier this month.
The kiwi rose 0.2 percent on the day $0.7461 after dropping 1 percent in the previous session, but still holding far above February's four-year trough of $0.7177.

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