Monday in Asia, the US dollar and Japanese yen declined against their major counterparts as a rally in most Asian stocks and easing worries about Greece’s debt problems fueled investors risk appetite, giving higher-yielding currencies a boost versus the safe-haven greenback and the yen.
Asian stock markets mostly rose today, thanks to a positive close on Wall Street Friday on the back of encouraging wholesale trade data. A firm trend in metal prices, easing worries about Greece’s debt problems and expectations of a sustained global economic recovery were also aiding the surge.
Japan’s Nikkei 225 index rose 0.4%, Hong Kong’s Hang Seng climbed 0.2%, Australia’s S&P 200 index advanced 0.70% and the All Ordinaries index was 0.75% higher.
Finance Ministers of the 16-nation eurozone have agreed to provide up to EUR 30 billion in emergency loans at below-market interest rates to debt-stricken Greece if it requires them. The aid will also involve the International Monetary Fund, which will make a further EUR 10 billion available to Athens this year.
The loans will be offered at a three-year financing programme at interest rates around 5%, based on the pricing formula used by the IMF. This is much lower than current borrowing costs facing Greece, with the yield on Greek government debt rising to a record high of 7.5% on Thursday.
Bank of Japan’s March meeting minutes revealed today showed that the board members conceded that uncertainty remains high regarding the outlook for capital spending, but they agreed that private consumption would remain flat and that deflationary pressures would begin to moderate. At the meeting, the members kept interest rates on hold at the record low of 0.10%, citing steady economic recovery.
The Japanese yen plunged to a 1-week low of 127.47 against the euro and a 6-day low of 88.27 against the Swiss franc by 1:00 am ET and both pairs moved on hold thereafter. On the downside, the yen may find target levels at 128.0 against the common currency and 89.3 versus the alpine unit. The euro-yen and the franc-yen pairs were worth 125.73 and 87.42, respectively at Friday’s close.
The yen advanced to a 4-day high of 93.0 against the US dollar before showing choppy around 6:00 pm ET Sunday. The greenback-yen pair, which ended last week’s deals at 93.16, is presently worth 93.16 and a possible resistance for the yen could be seen around the 92.80 level.
The Japanese currency recouped some of its early Asian session losses against the commodity linked currencies on commodities rally. Crude Oil for May rose $0.39 or 0.46% to $85.39, Gold grew 0.40% to 1165.65 per ounce and silver advanced 1.03 percent to 18.57.
Moving off from its early Asian session’s 5-day low of 87.37 against the Australian dollar, the yen advanced to 86.81 around 1:50 am ET. The aussie-yen pair that closed last week’s trading at 86.99 is presently quoted at 86.90.
The yen rose to a 4-day high of 92.55 against the Canadian dollar by 1:50 am ET, compared to 92.82 hit late New York Friday. On the upside, the Japanese currency may target the 92.0 resistance level. The pair is presently quoted at 92.72.
The Japanese yen that slumped to more than a 2-1/2 month low of 67.06 against the New Zealand dollar by 7:05 pm ET Sunday reversed its course thereafter. The yen rose to as high as 66.66 against the kiwi before pulling back to below last week’s closing quote of 66.70. The kiwi-yen pair is presently quoted at 66.77.
The US dollar slid to near a 7-week low of 1.5487 against the pound around 1:00 am ET, down 0.7 percent from Friday’s close of 1.5379. The US currency is currently worth 1.5460 against the pound and the dollar is likely to test support around the 1.5730 level.
Against the euro, the greenback touched a new multi-week low of 1.3693 around 1:00 am ET, down by more than 1.4 percent from last week’s closing quote of 1.3498. On the downside, the US dollar may find target around the 1.3740 level. The pair is presently quoted at 1.3665.
The dollar tumbled to a 10-day low of 1.0553 against the Swiss franc by 1:00 am ET and the pair moved sideways thereafter. The greenback-franc pair that closed last week’s deals at 1.0661 shed more than 1 percent thus far and the next likely support for the pair is seen near the 1.0530 level.
Looking ahead, the Italian industrial production report for February is due in the upcoming European session.
The Canadian housing starts and the U.S. monthly budget statement- both for March have been slated for release in the North American session.