Market News

The Euro slipped off a 2-week peak versus the U.S. Dollar, pushed there on news that the IMF has decided to increase its safety net intended for the Eurozone by 100%.

The Japanese Yen continues to hold close to recent lows against the U.S. Dollar, as investors are hesitant to move too aggressively ahead of next week’s policy.

In the Eurozone, the focus will turn to Spain and the next auction of Spanish 2-year and 10-year. Analysts says that the Euro is likely to be under renewed pressure as the auction looms, and could test support at $1.30.

The safe haven currencies fell in Asian trading as commodity-linked currencies staged a comeback. The Japanese Yen fell broadly and extended its fall from the 7-week peak versus the U.S. Dollar struck earlier in the week.

Chinese stock prices plummeted for the second day following reports that the country’s FDI (foreign direct investment) was down 2.8% in Q1 2012 as compared with the same period last year.

The Euro hit a 1-month trough against the U.S. Dollar and 1½-year low versus the British Pound Sterling as rising Spanish bond yields brought new worries of Eurozone debt contagion.

For the second consecutive day, the Euro had edged higher against the U.S. Dollar and touched on a 1-week peak but analysts agree that the Eurozone’s debt crisis is likely to minimize potential gains.

Commodity linked currencies jumped as risk appetite was whetted following yesterday’s comments by on ECB official who hinted that there was a possibility that the central bank could embark on additional bond purchases.

The safe haven Japanese Yen remained near a multi-week peak versus a broad mix of currencies on heightened risk aversion.

The Japanese Yen edged back up off of the day’s lows versus the U.S. Dollar though analysts expect it will continue to stay under pressure.

The greenback hit a one-month low against the yen, hitting a low of 81.19 at one point, while the euro continued to flounder during the Asian session.

As it holds close to a 3-week low established against the U.S. Dollar in the Asian session, the Euro is on track to post the worst week in several months.

Both the Euro and the Australian Dollar took hard hits in trading yesterday and are today still within striking distance of the recently established lows. Several events combined to work against the commodity-linked currencies, including Tuesday’s Fed minutes and yesterday’s ECB meeting and dismal outcome of the Spanish bond auction.

The Australian Dollar struck an 11-week trough against the U.S. Dollar following an unexpected outcome in balance of trade figures.

The Euro fell broadly in Asian trading as the repercussions of yesterday’s less than impressive jobs and manufacturing data continue to take its toll.