Categorized | Forex

FOREX-Euro slips slightly but seen supported ahead of ECB

FOREX-Euro slips slightly but seen supported ahead of ECB

* Euro stop-loss orders said to lie below $1.2475

* Aussie skids to 6-week low on China slowdown fears

By Lisa Twaronite

TOKYO, Sep 5 (Reuters) – The euro dipped slightly against the dollar in early Asian trading on Wednesday but was seen supported before Thursday’s European Central Bank meeting at which the ECB is expected to unveil details of its long-awaited debt-buying plan.

The European unit percent was down 0.3 percent at $1.2531 , off its Tuesday session high of $1.2629 but still not far from Friday’s high of $1.26378 on trading platform EBS, which was its strongest level since early July.

The euro bumped through stop-loss orders which were said to have been placed at $1.2550, which was a 50 percent retracement of its recent rise from $1.2465 on Aug. 28 to Friday’s high, as well as at Tuesday’s low of $1.2555. Further stops were said to lie below $1.2475.

“The euro is finding the going a little bit easier. The prospect of the collapse of the euro is becoming a distant memory with many former bears. And the temperature seems to be rising amongst the perma bears,” said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co.

ECB President Mario Draghi told European lawmakers on Monday that purchases of short-term sovereign bonds would not breach European Union rules, according to a recording obtained by Reuters.

The euro “is rangebound but seems to be quite well supported. The high expectations for the ECB meeting on Thursday remain, after Draghi’s closed-door meeting on Monday,” Wilkinson said.

Still, fears that the ECB could disappoint and trigger a further euro correction prompted some investors to take profits on its recent gains.

The euro also slipped slightly against the yen, down 0.3 percent to 98.25 yen.

The euro also came under some pressure on Tuesday after worse-than-expected data on U.S. manufacturing gave the dollar a safe-haven lift.

The dollar was steady against its Japanese counterpart at 78.46 yen.

The Australian dollar bought $1.0200 after dropping to a six-week low of $1.0191 on growing speculation the Reserve Bank of Australia will cut interest rates to cushion the economy from falling commodity prices.

Australia’s central bank held rates steady on Tuesday as widely expected, though a slowdown in China has left the country’s commodity-fuelled economy vulnerable.

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