RTTN:Euro Halts Recovery Ahead Of EU Finance Ministers' Meeting
The euro halted last week's recovery against majority of its key counterparts in early deals on Monday as concerns about the European debt impasse hurt investor sentiments.
Four separatist parties in Spain's Catalonia won a majority in regional elections over the weekend, adding more economic and political pain to Spain and clouding Madrid's push for fiscal austerity.
Investors also concerned about the likely outcome of another Eurozone finance ministers' meeting later in the day on the payment of long-awaited aid to debt-stricken Greece.
Eurozone finance ministers will meet in Brussels to finalize a deal to clear the next tranche of financing worth EUR 31.5 billion for the debt-stricken Greece after failing to forge an agreement on November 21.
The ministers held a conference call on Saturday to clear the hurdles before the Monday meeting. Speaking to the French media on Sunday, French Finance Minister Pierre Moscovici said the Eurogroup is close to a deal.
Pointing out that a solution is "possible" at the meeting, the minister said "we made strong progress", meaning the Europeans will have a common position" at today's discussions.
After last week's meeting, Eurogroup President Jean-Claude Juncker said the ministers have made progress in identifying "a consistent package of credible initiatives aimed at making a further substantial contribution to the sustainability of Greek government debt."
The euro depreciated almost 1 percent to reach as low as 106.11 against the yen around 4:00 am ET from early Asian session's 7-month high of 107.16. Immediate support for the cross is seen around the 105.72 level.
Minutes from the Bank of Japan's October 30 policy meeting revealed that members of the monetary policy board believe it is imperative that the country overcome the deflationary pressures that have now plagued Japan for years. The members said that they would continue with powerful monetary easing until the inflation target of 1 percent is at least in sight, if not achieved.
The euro also paused its Asian session advance against the dollar, falling to 1.2945/50 area, down 0.35 percent from Friday's fresh 3-week high of 1.2991. If the euro bears dominate in the coming sessions, 1.2880 is seen as the next likely support level in the near-term.
The common currency traded back to below 0.81 against the pound, falling as low as 0.8084 from last week's 1-month high of 0.8111. The euro-pound pair is now hanging in the 0.81 area with chances of revisiting the 0.8075/78 support level in the near-term.
The single currency tested last week's multi-day lows against the Swiss franc in early deals Monday, falling to near Friday's low of 1.2039. Overall picture shows that the EUR/CHF pair may re-test the 1.20 peg rate after a gap of more than 2-months.
Looking ahead, Germany's GfK consumer confidence data is due at 7.00 am ET. The forward-looking sentiment index is forecast to fall slightly to 6.2 in December from 6.3 in November.
