By: Barbara Zigah
Even as the Euro steadies in choppy Asian trading, it remains vulnerable to further declines as the E.U. summit begins later today. As reported at 12:27 p.m. (JST) in Tokyo, the Euro was trading relatively flat against the U.S. Dollar, holding at $1.3215.
At the E.U. summit, the last in 2010, leaders will no doubt hope to end the year on a positive note, with resolution to the fiscal and debt crises that have long plagued the region. Clearly, stopping the contagion from spreading will be among their highest priorities; it’s also certain that there will be discussion about the possibility of creating a permanent mechanism which will resolve any impending crises.
Since breaching resistance at 84.00 Japanese Yen, the U.S. Dollar has been holding steady against the Japanese Yen, trading at 84.24 Yen; on Wednesday, the U.S. Dollar traded at 84.51 Yen, a 3-month high.
There is speculation that corporate selling in Japan may send the Yen higher, and a break of 84.50 Yen is considered possible. Market players believe that the recent surge in U.S. treasury yields has helped to boost the greenback, and are expecting that further yield rises will continue to help the U.S. unit.
The U.S. Dollar Index, which measures the greenback’s strength against major currencies, rose above 80.00 .DXY in overnight trading, a rise of more than 1%, but is trading steady at 80.23 .DXY in Asia.