Previous session overview

The euro fell against the dollar in Asia Tuesday after Australia's central bank chief voiced concerns over the effect of sovereign debt problems on the global economy, such as those of euro-zone member Greece, prompting short-term players to sell the common currency.

The risk-sensitive common currency may continue to edge down for the rest of the day if share markets in Europe and the U.S. are sluggish, dealers said. Japan's Benchmark 225 Nikkei Stock Average was down 0.02% in the early afternoon session.

The dollar rose slightly against the yen as U.S. hedge funds and other short-term players bargain-shopped the U.S. units after its overnight fall. At 0450 GMT, the greenback traded hands at JPY89.34 compared to JPY89.07 late Monday in New York.

The ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies including the yen and euro, was at 80.960 compared to 80.728.

The euro fell to USD1.3511, from USD1.3562 late Monday, and the British pound skidded 0.8% to USD1.4871, continuing its slide.

The pound plunged on Monday, as worries about the outcome of the U.K. general election and the ability of the government to remedy the high fiscal deficit put the currency under heavy selling pressure.

The Australian dollar got an early lift against its U.S. counterpart in Asian trading Tuesday after the Australian central bank raised interest rates as expected, but the move only briefly stalled the greenback's overall rise. The Reserve Bank of Australia raised its policy rate by a quarter point to 4.0%, as most had expected, marking the central banks' fourth rate increase in five meetings after last month's surprise decision to stand pat.

Market expectation

EURUSD getting flashed that a semi official name has sell interest at USD1.3540. Rate currently trades around USD1.3525. Real money also noted selling in recent trade.

EURGBP resistance seen placed toward stg0.9100 (stg0.9098 61.8% stg0.9150/0.9015), a break may open a move toward stg0.9120 (stg0.9118 76.45) ahead of stronger area between stg0.9150/55. Support remains at stg0.9070 ahead of stg0.9045/40.

Pound recovered to around the USD1.4920 level on the reported Asian sovereign buys, but just as quickly sinks back to USD1.4885. Getting talk that the UK clearer could have more sell interest to be executed today, the name was mentioned earlier when rate was sold off from USD1.4930 to USD1.4855.

European stocks are expected to open largely unchanged Tuesday, as investors await further developments from Greece, which is due to offer more details on its austerity plans this week.

Disclaimer: the data made available by Dukascopy (Suisse) SAis for informational purposes only. Publication of this data by Dukascopy (Suisse) SA does not constitute provision of investment advice and Dukascopy (Suisse) SA assumes no responsibility with regard toany information, forecast or recommendation herein contained and assumes no responsibility with regard toany losses resulting from any activities conducted the basis of this data, including any investment decisions.

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