WSJ:WORLD FOREX: Euro Up From Early Sell-Off But Still Vulnerable
-- Euro recovers slightly from late New York, early Asia sell-off
-- Euro earlier reached lowest point against U.S. dollar in a month, all-time low against Swiss franc
By Geoffrey Rogow
Of DOW JONES NEWSWIRES
SYDNEY (Dow Jones)--The euro recovered partly from an earlier plunge by early afternoon in Asia, though a sell-off in riskier assets in New York and London into the session had investors still on edge ahead of Friday's key nonfarm payrolls report in the U.S.
After selling broadly late in New York and early in Asia, the euro recovered some of its lost footing in recent action against both the dollar and the Swiss franc. After the Dow Jones Industrial Average lost more than 500 points Thursday, the euro had earlier pushed to a fresh all-time low against the Swiss franc and its lowest point against the dollar since July 18.
Partly helping the bounce-back was a retracement for stocks in Hong Kong and Japan, with those markets coming off their session lows. Traders said flows were subdued ahead of Friday's nonfarm payrolls report.
"It's not about fundamentals right now, it's about preservation of capital with concerns about liquidity in general," said Sue Trinh, a currency strategist with RBC Capital Markets in Hong Kong.
The subdued action came in stark contrast to New York on Thursday, which had one of the busiest sessions of all time for foreign exchange traders, according to EBS. Data from EBS in New York showed that trading totaled $405 billion, the third busiest day ever, while activity in the dollar against the yen of $105 billion was an all-time high. There were 252,746 total deals, the second highest ever.
Setting the focus of Asian traders on the euro was a decision by the European Central Bank to restart buying of troubled euro-zone bonds, which did little to soothe investors or the euro.
"The lack of coordination with the efforts there is just killing sentiment about the region," said Robert Rennie, chief currency strategist at Westpac.
At 0450 GMT, the euro was at $1.4122, up from an earlier low of $1.4055 and from $1.4100 in New York. The common currency was at Y111.05 from Y111.27
The dollar was at Y78.70 from Y78.90, after a sudden, brief jump to an intraday high at Y79.42 at 0440 GMT, according to EBS. Traders in Tokyo said the move was likely due to large trades being executed, and was likely not intervention.
The ICE Dollar Index was at 75.141 from 75.252.
Interbank Foreign Exchange Rates At 00:50 EDT / 0450 GMT
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