Previous session overview
The euro rose modestly against the dollar and yen in Asia Tuesday as concerns over Greek debt ebbed slightly, but the common currency remained vulnerable ahead of a vote of confidence for Greek Prime Minister George Papandreou later in the day.
While many dealers expect the vote to pass, any signs of fresh political uncertainty would add to concerns about the country's sovereign debt crisis, likely pushing the euro down further.
The government must pass new austerity measures, scheduled for a parliamentary vote next Tuesday, in order to receive its next installment of aid from the European Union and International Monetary Fund.
At 0450 GMT, the euro was at USD1.4341, from USD1.4304 late Monday in New York. Against the yen, it traded hands at JPY114.95, up from JPY114.77. The ICE Dollar Index, which measures the greenback against a basket of currencies including the euro, was down at 74.856 from 75.022.
The dollar was little changed against its Japanese counterpart at JPY80.14 from JPY80.24.
The Pound stumbled along with some downside seen on general strike fears. The government announced over the weekend that the working age will be increased to receive a pension in an effort to save billions in future payouts. A strong bounce into the close was seen as cable tracked the Euro higher.
The Australian dollar succumbed to similar pressure Tuesday after minutes from the Reserve Bank of Australia's June meeting showed the board is in no rush to tighten policy. The currency was at around JPY84.58 at 0450 GMT, compared with JPY84.86 late in New York.
Resistance for the EURUSD is tipped at USD1.4450 for the rest of the global day, dealers say. But no major moves are expected in the coming hours, as market participants refrain from big bets ahead of a confidence vote for Greek Prime Minister George Papandreou scheduled to begin at 2100 GMT, with the exact timing of the announcement of results unclear.
Analysts said the dollar's near-term direction depends largely on the outcome of the Federal Reserve's policy-setting Open Market Committee meeting and press conference by Fed Chairman Ben Bernanke Wednesday. If Bernanke strikes a dovish tone, given recent weakness in economic indicators, the dollar could face renewed selling pressure, they said.
Dealers said the remarks added to the guarded view that an immediate worsening of the crisis could be avoided, after European leaders expressed confidence Monday that Greece would indeed opt for more austerity measures.
Most important events of the day
|10:00||EU||ZEW (Economic Sentiment)||Jun||Index|
|11:45||EU||ECB hold non-rate setting meeting|
by Dukascopy Bank SA