Tuesday, 11 Jan 2011

Forex: EUR Bearish Ahead of Debt Sales

The euro languished against the US dollar in Asia today amid jitters over European bond sales this week, and as a Japanese statement of support for a European bailout fund failed to give the 17-nation single currency any lasting support.

Analysts have said the euro will likely continue to fall if the government bond tenders of several fiscally troubled euro zone members reveal weak demand. The first test comes tomorrow, when Portugal will attempt to sell up to 1.25 billion EUR worth of government debt.

The euro managed to rise weakly this morning after Japanese Finance Minister Yoshihiko Noda said Tokyo plans to buy debt to be issued later this month by the European Financial Stability Facility to raise funds for Ireland.