Euro strengthens ahead of ECB meet
September 7, 2012, 12:19 am TWN
TOKYO--The euro strengthened in Asian trade Thursday as markets braced for the outcome of a European Central Bank meeting later in the day and the release of U.S. employment data on Friday.
The single currency bought US$1.2602 and 98.85 yen in Tokyo afternoon trade, up slightly from US$1.2600 and 98.78 yen late Wednesday in New York.
The dollar gained on the Japanese currency at 78.43 yen from 78.38 yen.
"It's difficult to take positions before we see results of the two major events related to the euro and the dollar," said Yosuke Hosokawa, analyst with Sumitomo Mitsui Trust Bank, referring to the central bank meeting and U.S. data.
Media reports said the ECB planned to re-enter sovereign debt markets with unlimited bond purchases in a bid to bring down debt-hit eurozone members' borrowing costs and prop up the embattled euro.
Critics led by Germany have warned that buying the debt of troubled nations in the 17-nation bloc would let them avoid painful austerity cuts crucial to repairing their fiscal health.
Speculation about the central bank's plans come amid growing concerns about the state of the global economy with recent poor manufacturing figures from the U.S., China and Europe weighing on hopes for a recovery.
Moody's lowering of its rating outlook on the European Union to negative from stable added to the gloom.
Traders are eyeing U.S. employment data including non-farm payrolls figures on Friday to gauge the likelihood of fresh stimulus from the U.S. Federal Reserve, whose chief Ben Bernanke hinted at such a move last week.
The dollar was mixed against other Asia-Pacific currencies.
It fell to SG$1.2461 from SG$1.2480 on Wednesday, to 1,134.30 South Korean won from 1,135.68 won and to 41.90 Philippine pesos from 41.95 pesos.
The greenback rose to 31.27 Thai baht from 31.24 baht, to 9,588 Indonesian rupiah from 9,586 rupiah and to 55.99 Indian rupees from 55.88 rupees while it was unchanged at NT$29.84.
China's yuan bought 12.35 yen against 12.31 yen.
The Australian dollar, following a surprise drop in the country's jobless rate in August, bought US$1.0221 from US$1.0191.