WSJ:WORLD FOREX: Euro Slightly Higher In Quiet Asian Trade
-- The euro slightly higher vs dollar and yen in quiet Asian trade
-- South Korean's won falls vs dollar on N Korean speculation
-- Speculation that euro may rise on recent dollar-funding operation by ECB.
By Tatsuo Ito
Of DOW JONES NEWSWIRES
TOKYO -(Dow Jones)- The euro was slightly firmer against the dollar and the yen in quiet Asian trading Tuesday, with many players staying sidelined ahead of London's public holiday.
While major currencies failed to find a clear direction, the South Korean won fell against the U.S. dollar due to speculation about North Korea's leadership situation. The South Korean Kospi briefly slipped more than 2%.
"The South Korean won and its stock market took a hit. But trade of major currencies wasn't affected," said Kuniyuki Hirai, manager of the foreign exchange trading department at Bank of Tokyo-Mitsubishi UFJ.
At 0450 GMT, the dollar was at KRW1,158.00, according to EBS, after touching a one-week high at KRW1,160.10.
"There's still uncertainty over the new leadership in North Korea," said Yuji Saito, director of the foreign-exchange department in Tokyo at Credit Agricole Corporate & Investment Bank.
Kim Jong Eun is presumed the new leader after the death of his father Kim Jong Il, but it remains unclear if the military is supporting him.
Traders will again focus on the European sovereign debt crisis when the U.S. market reopens after Christmas holidays later in the day, particularly on how last week's three-year dollar-providing operation by the European Central bank will keep improving risk sentiment.
"Views over the effect of the operation were split, but there are more positive views on this as time goes on," MUFG's Hirai said. "Given this, it wouldn't be surprising that the euro is set to rise," he added.
Meanwhile, looking ahead to 2012, there is some expectations that the ECB will adopt bolder monetary policy or quantitative credit easing amid concerns that austerity measures in Europe will put its economy into a recession. This could help weaken the euro, Hirai added.
Concerns over the eurozone debt crisis could continue to weigh on the single currency ahead of Italian government bond redemption from late January, Credit Agricole's Saito said, with focus on how European leaders will iron out the details of an agreement made earlier this month to solve the debt problem.
At 0450 GMT, the euro was at $1.3076 from $1.3063 in late Asian trade Monday. The common currency was at Y101.89 from Y101.69. The dollar was at Y77.92 from Y77.94. The U.K. pound was at$1.5619 from $1.5622.
Interbank Foreign Exchange Rates At 23:50 EST / 0450 GMT
