By: Barbara Zigah
In mid-afternoon trading in Asia, the Euro briefly fell to a 3-week low versus the Japanese Yen, which was precipitated by a decline in regional stock prices. As reported at 1:12 p.m. (JST) in Tokyo, the common currency fell to 111.95 Yen, before rebounding slightly to 112.39 Yen on the EBS trading platform. Most analysts agree that the remainder of today will be relatively quiet in Asia as investors are awaiting more momentous news later this week from the Eurozone and the U.S. They suggest that the Euro, as well as higher risk currencies such as the New Zealand and Australian Dollars, will likely be under sell pressure against the Japanese Yen should share prices on the European and New York markets fall.
The Euro also fell against the U.S. Dollar, trading at $1.3760 from Friday’s late trade of $1.3800 in New York. The possibility that a Portuguese bailout might be in the making within the next few weeks is also adding pressure to the Euro; some see it as inevitable given that their bond yields have been consistently above 7% over the past 16 trading sessions.
Later this week, the policy setting committee of the European Central Bank meets, and the focus is likely to be the possibility of an interest rate hike to hold inflationary pressures in check.