By V. Phani Kumar, MarketWatch
HONG KONG (MarketWatch) — The euro rose back above the $1.25-level during Asian trading hours Tuesday amid hopes for policy action to ease the euro zone’s debt crisis, with the Group of Seven major economies to discuss the matter later in the day.
The euro EURUSD +0.1880% was fetching $1.2525, up from $1.2493 in North American trade late Monday, when the currency pushed past the $1.25 handle a few times but failed to stay above the psychologically important mark.
G-7 finance ministers and central bank governors were slated to hold a conference call later Tuesday on the European debt crisis. The G-7 consists of the U.S., the U.K., Japan, Germany, France, Italy and Canada.
Mitul Kotecha, head of global foreign-exchange strategy at Credit Agricole, said that a “slightly more upbeat” tone was aiding risk assets, and that the focus was squarely on the teleconference of G-7 leaders later Tuesday, where they are “expected to put more pressure on European leaders to act.”
However, “the respite looks temporary unless followed by concrete measures out of the euro zone,” he said.
The ICE dollar index DXY -0.23% , which measures the greenback against a basket of six other major currencies, dropped to 82.397 from 82.528 late Monday.
Among other major currency pairs, the British pound GBPUSD +0.0856% was changing hands for $1.5400, up from $1.5382, while the U.S. dollar USDJPY +0.0946% was little changed against the Japanese yen at ÂĄ78.329, compared with ÂĄ78.330 late Monday.
The Australian dollar AUDUSD +0.7243% , meanwhile, added to gains against the greenback despite immediate volatility after the Reserve Bank of Australia cut its policy interest rate by a quarter-point to 3.5%. Read more about the RBA decision.
The currency was trading at 97.75 U.S. cents, up from 97.54 cents just before the decision was announced, and higher than its range around 97.27 cents late Monday.
Varahabhotla Phani Kumar is a reporter in MarketWatch's Hong Kong bureau.
