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The euro hit a one-week high against the yen in Asia Monday.
Written by article default Monday, 14 June 2010 20:08
Market OverviewThe euro hit a one-week high against the yen in Asia Monday as upturns in Asian stocks boosted non-Japanese hedge funds' appetite for the risk-sensitive euro on its lows.
Buying by non-Japanese hedge funds and Asian investors pushed the euro up to YEN112.01, its highest since June 4. The unit marked a one-week high of USD1.2208 after automated stop-loss buying-orders were triggered around USD1.2150. As of 0450 GMT, the euro was at YEN111.80 and USD1.2175 compared with YEN110.65 and USD1.2077 late Friday.
Elsewhere, the dollar was at JPY91.86 as of 0450 GMT, up from JPY91.62 late Friday.
The dollar index (DXY), which tracks the greenback against a trade-weighted basket of six major currencies, was at 86.942, down from 87.469 in North American trading late Friday.
Data released Sunday by the Bank for International Settlements showed French and German banks continued to hold the greatest exposure to euro-zone countries facing market pressures at the end of last year.
Banks based in the euro zone accounted for USD1.58 trillion, or 62%, of all internationally active banks' exposure to residents of Greece, Ireland, Portugal and Spain.
The British pound fell over 1% on the day against the dollar and the euro, pressured by earlier weak UK industrial output data. The pound's drop came after data showed an unexpected fall in UK industrial output during April.
The Australian and New Zealand dollars rounded off their best week in five months today, leading some analysts to warn the pair may have risen too far too fast given the still fragile mood in markets. For the week, the Aussie and kiwi’s gain of 2.7% was the best performance since January.
Market expectation
The euro is stronger against the U.S. dollar and the Japanese yen after Friday's better-than-expected U.S. consumer sentiment data for June.
European stocks are expected to open higher Monday, taking their cue from a late rally on Wall Street and a positive Asian session.
Dealers said the euro may gain more ground if European industrial output data, due at 0900 GMT, come in better than expected, buoying share markets and boosting confidence in the unit.
The euro may widen gains toward USD1.2250 and YEN112.30 if stock prices improve after better-than-expected figures in Europe's industrial production data for April, dealers said. Economists expect a 0.5% gain in April on month compared with a 1.3% rise in March.
U.S. currency may not rise above YEN92.30 in the global day, traders said.