On speculations of a snap election in Ireland due to a protest on financial aid, euro fell for a second day against the dollar and yen Tuesday. In Singapore trading, euro fell to $1.3601 as of 1:48 p.m. in the afternoon from $1.3627 in New York Monday. The 16-nation currency dropped 0.1 percent to 113.46 yen while the dollar traded at 83.42 yen from 83.33 yen. Australian dollar, on the other hand, fell 0.1 percent to 82.27 yen. The MSCI Asia-Pacific exclusive of Japan Index of shares dropped 1.4 percent. Japan’s financial markets were shut for the holiday. Analysts said that speculations of a snap election in Ireland caused the two-day decline in the European currency against the other currencies. It has weakened against 12 of its 16 major counterparts subsequent to the statement of Moody’s Investors Service saying that it may announce a multi-notch downgrade of Ireland, adding to concern Europe’s debt crisis will spread. Previously, Australian currency has led losses in higher yielding currencies as the Irish situation fueled a recession in Asian stocks. Greg Gibbs, currency strategist at Royal Bank of Scotland in Sydney, said that the risk to markets is that nobody is aware whether the government will stick to the budget next year. He added that political uncertainty has caused the positive response out of the package to be short-termed. At this point, euro is struggling. Niall O’Connor, a New York-based technical analyst at JPMorgan, said that the euro has posted an intra-day highs and lows on Monday that surpassed levels from the previous session and closed 0.3 percent lower, signaling further declines. A break of previous week’s decline of $1.3448 will target a decline toward $1.32. Europe common currency may fall to $1.29 is it drops through support near $1.32. In a telephone interview, he said that the fact that the market is struggling to move higher suggests that the underlying setup is still weak and there are odds for more downside.

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