WSJ:WORLD FOREX: Euro Steady As Asia Geopolitical Concerns Ease
-- Euro steady against dollar, other higher-yielding currencies rise, amid improved risk-sentiment
-- Uncertainty after death of North Korean leader eases
-- Focus shifts to ECB announcement of long-term refinancing operation results Wednesday
By Kosaku Narioka
Of DOW JONES NEWSWIRES
TOKYO (Dow Jones)--The euro was steady against the dollar Tuesday in Asia, while other higher-yielding currencies such as the Australian dollar and the Korean won rose, amid improved risk-sentiment as most Asian stock markets recovered the day after the news of Kim Jong Il's death.
Most Asian stock markets were modestly higher Tuesday and the Korean won rose versus the dollar amid receding concerns that the death of the North Korean leader, announced Monday, might spur instability in the region.
The dollar fell to KRW1,161.1 as of 0550 GMT, compared with KRW1,177.3 late Monday in New York.
The euro was at $1.3008 as of 0550 GMT from $1.2998 late Monday in New York.
"While G-10 currencies showed little movement, the Korean won was bought back after being sold off yesterday," said Atsushi Hirano, head of FX sales in Japan at the Royal Bank of Scotland, adding that regional currencies such as the Australian dollar followed suit.
The Reserve Bank of Australia Dec. 6 policy meeting minutes, which showed that the relative health of the Australian economy argued against cutting rates, helped the Australian dollar, dealers said. The Australian unit rose to $0.9938 from $0.9897.
Improved sentiment provided some support for the risk-sensitive euro, but the region's continuing European sovereign debt crisis weighed on the common currency.
The focus is now shifting to the European Central Bank's announcement of its long-term refinancing operation results Wednesday.
"The key is the amount," said Kenichiro Ikezawa, fund manager at Daiwa SB Investments.
A substantial amount would suggest banks are taking in funds to reinvest them in sovereign bonds, Ikezawa said. "That's why the ECB introduced the operation," he said, but "if the amount is insubstantial, then that's a worry."
Meanwhile, the safe-haven yen remained in demand versus the dollar and the euro as fears of a slowdown in the U.S. economy were stoked by the threat of a New Year's tax increase in the U.S., with Congress deadlocked over legislation to extend a payroll tax break and unemployment benefits, dealers said.
Elsewhere, Japan's government said Tuesday it will boost the size of its war chest to intervene in the foreign exchange markets by Y30 trillion to be able to flexibly respond to "any movement" in the currency market.
Against the yen, the euro was at Y101.43 from Y101.46, according to EBS via CQG.
The dollar was at Y77.98 from Y78.03 and was unchanged at CHF0.9375. The British pound was at $1.5517 from $1.5499.
The ICE Dollar Index, which tracks the U.S. dollar against a basket of currencies, was at 80.314 from 80.373.
Interbank Foreign Exchange Rates At 00:50 EST / 0550 GMT
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