By V. Phani Kumar, MarketWatch
MADRID (MarketWatch) — The euro on Tuesday clawed back some of the steep losses it suffered the previous session, while the dollar retreated ahead of the release of a slate of U.S. economic data later in the day.
The euro EURUSD +0.1815% was fetching $1.2859 by early European trading hours, up from $1.2855 in North American trade, but way off the $1.3048-level seen in Asia on Monday.
Against the Japanese yen, the euro EURJPY +0.1250% was changing hands at 121.53 yen, compared with ¥120.90.
The common currency had tumbled in the European and U.S. sessions on Monday, reversing the gains recorded earlier in the wake of an announcement of a bailout for Cyprus, after Dutch finance minister Jeroen Dijsselbloem indicated in an interview that levies on certain bank deposits could also be imposed for other troubled countries looking to secure financial aid.
The euro stayed under pressure through early Asian trade Tuesday, and into the European session. That came even as Dijsselbloem later issued a clarification, saying that Cyprus — where uninsured deposits of more than €100,000 would suffer losses — was a “specific case with exceptional challenges.”
“Regardless of how unique the problems are for Cyprus, the restructuring of the country’s banks sets a precedent that could be revisited in future bailouts,” said Kathy Lien, managing director at BK Asset Management.
She added the reason behind the euro’s weakness, despite the Cyprus bailout agreement, was that “the deal does not eliminate the near term risks for Europe.”
Meanwhile, the ICE dollar index DXY -0.11% , which measures the greenback against six major global currencies, fell to 82.877. The index was at 82.886 in the U.S. on Monday.
The WSJ dollar index XX:BUXX -0.11% , a measure that gauges the greenback against a slightly wider basket of rival units, eased to 73.44 from 73.47.
The dollar’s moves came ahead of a full slate of economic data due later in the day, including the durable goods orders and new home sales figures for February and consumer confidence data for March.
The greenback USDJPY -0.07% , which charted a choppy course against the yen during the session, was buying ¥94.17, up a tad from around ¥94.13 in U.S. trading Monday. The currency moved in a range between ¥93.86 and ¥94.45 during the Asia session, according to FactSet data.
The pair’s movements came after new Bank of Japan Gov. Haruhiko Kuroda said at a parliamentary session that buying five-year or longer-term government securities was one option before the central bank in easing monetary policy. Read full story on Kuroda’s remarks.
Among other major currency pairs, the British pound GBPUSD +0.02% rose to $1.5187 from $1.5176, while the Australian dollar AUDUSD +0.09% was fetching $1.0476 as compared with $1.0461.
Varahabhotla Phani Kumar is a reporter in MarketWatch's Hong Kong bureau. Follow him on Twitter @MktwKumar.
