The dollar was trading close to two-week lows against the euro and also fell against the yen as it retraced gains from fresh seven-months highs hit in overnight trades. While talks between European leaders have not yielded any result so far, traders remain optimistic that some sort of compromise will be reached at the meeting on Monday. Such hopes were also boosted by reports that Germany may be easing from its hard-line stance and may in future agree to take a hair-cut on Greek debt.
Trading has been quiet in the Asian session with Japanese markets closed and light trading is expected in the U.S. after the Thanksgiving holiday and ahead of Black Friday. In data releases overnight, flash European PMI was a little higher at 46.2 but remained below the 50 mark that separates expansion from contraction. Eurozone consumer confidence, however, continued to slide in November with a reading of -26.9 compared with -25.6 in October. A successful Spanish debt auction was enough underpin risk assets and this trend continued into Asian trades.
The euro was at $1.2884 after starting the session at $1.2882 while the yen was trading at Y82.25 vs the dollar compared with Y82.43 early. The dollar met with profit-taking against the yen in Asian trades after rising to a seven-month high. AUD extended gains but struggled to break above the $1.0400 mark and largely traded in the upper half of the $1.0375 to $1.0400 range so far in Asian trades.
Sentiment got a small boost from MNI China Flash Business Sentiment indicator for November which rose further to 53.57 from 51.86, thus remaining in expansion for 3 months in a row. The data led to optimism that China’s CFLP official PMI may be higher than earlier expected. Among other currencies, the dollar rose further against the won, up 0.1% to KRW1086.88 as the Asian unit remains under pressure after reports its deputy finance minister Choi Jong-gu warned the government is considering some measures to reduce volatility in the forex market driven by expectations of further rise in the won.
EasyForexNews Research Team