MSN:ASIA FX: Dollar Higher; Greek Vote, Spanish Auction Eyed
TOKYO, Nov. 15 (MNI) - The U.S. dollar was higher on Tuesday in Asia, with the euro resuming its slide as global stocks slid after Italy paid a euro-era high price to sell five-year bonds on Monday, spurring concerns about the depth of the sovereign debt crisis in Europe.
Investors now await the outcome of Wednesday's confidence vote in new Greek Prime Minister Lucas Papademos and Thursday's meeting of euro-zone finance ministers in Brussels for implications for the region's debt crisis.
The Italian bonds yielded 6.29% on Monday, up from 5.32% at the last auction on Oct. 13.
The Standard & Poor's 500 Index fell 0.85% on Monday, while the DAX Index lost 1.19% and Italy's FTSE MIB Index dropped 1.99%. The dollar is at Y77.09 versus Y77.08.
Today in Asia, the Nikkei 225 Stock Average finished Tuesday down 0.72% at 8,541.93.
"The sovereign debt crisis now shows some signs of contagion to Spain," said Toshiya Yamauchi, senior analyst at Ueda Harlow Ltd.
"Under such circumstances, investors feel stronger risks to buying the euro than selling it," he said.
Yields on 10-year Spanish bonds climbed 25 basis points to 6.11% on Monday.
Spain is scheduled to auction bills maturing in 12 months and 18 months on Tuesday.
The euro was at $1.3583 following a $1.3575 to $1.3640 range and versus $1.3630 on Monday, while trading at Y104.66 following a Y104.63 to Y105.26 range and versus Y105.06 on Monday.
Investors also await the release this week of euro-zone's GDP and CPI data for implications for the EU economy.
EU's GDP data will be released on Tuesday and CPI data will be published on Wednesday.
"If incoming data turn out to be weak, it may raise concerns about repayment of public debt in euro-zone's peripheral countries and fund-raising plans, thereby adding to selling pressure on the euro," Yamauchi said.
On the technical front, investors focus on whether the euro can protect $1.3565, the bottom of the cloud on daily Ichimoku chart, with a break there seen sending the single currency toward the Nov. 10 low of $1.3484.
On the upside, the euro is expected to face strong resistance at $1.3804, the 21-day moving average.
Speculative accounts trimmed their net euro short position as of November 8, according to U.S. CFTC data, released Monday.
The non-commercial futures-only (ex-options) section of the CFTC's COT report showed that speculators decreased their net euro short to -54,257 contracts from last week's net euro short of -60,060 contracts a week earlier.
Meantime, the dollar was rangebound against the yen, with the downside firmly supported by Japanese importers and retail investors.
Investors also refrained from taking fresh positions ahead of the release this week of U.S. data and a series of remarks by Federal Reserve Board officials for implications for the FX market.
U.S. retail sales, due Nov. 15, are forecast to show a 0.2% rise in October following a 1.1% gain in the previous month, while overall CPI is projected to be unchanged in October following a 0.3% rise in September, according to survey of economists by Market News International.
Meantime, William Dudley, the president of Federal Reserve Bank of New York, will deliver his speech on Thursday and Friday, while other members of Fed are also scheduled to speak this week.
"Depending on the outcome of U.S. data, risk aversion may grow stronger," said Junichi Ishikawa, senior analyst at IG Markets Securities Co.
"The focus is whether the dollar can protect a key technical chart level of Y77.04, or the bottom of the cloud on daily Ichimoku chart," he said.
The dollar was at Y77.12 following a Y76.96 to Y77.31 range so far and versus Y77.08 on Monday.
Meantime, the Aussie gave up most of its earlier gain due to selling stemming from renewed risk aversion.
The South Pacific nation's currency earlier rose following the release of the minutes of the Reserve Bank of Australia's Nov. 1 board meeting.
The minutes showed that board members discussed both options of leaving the cash rate unchanged and easing, and finally decided that a "modest easing" was appropriate, thus showing that the RBA had no plans of lowering the cash rate further, as many expected.
The Aussie was at $1.0165 following a $1.0155 to $1.0226 range and versus $1.0207 on Monday.
