Forex-Euro wobbly ahead of event-packed U.S. week

Mon Jan 2, 2012 6:30pm EST
 
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By Cecile Lefort

SYDNEY (Reuters) - The euro got off to a rocky start against major currencies on Tuesday, standing just above a decade trough on the yen in Asia and looked set to remain under pressure in 2012 from Europe's debt crisis.

The U.S. economy will be front and center this week - starting with ISM Manufacturing on Tuesday where an improvement to 53.2 is expected from November's reading of 52.7.

It will be followed by the release of the FOMC Minutes where investors will look for signs of another round of quantitative easing. But the main event for the week will be non-farm payroll data on Friday where analysts are hoping for a robust rise of 150,000.

The euro was at 99.42 yen, having slipped as deep as 98.71 overnight on the EBS trading platform, its lowest since late 2000, following breaks of major chart support from 100 yen.

The single currency also reached record lows on the Australian dollar. It was last at A$1.2633, having shed more than two cents in the past week, having broken through key levels between A$1.2900-A$1.3000. Technical charts point to further downside with a test of A$1.2500 in sight, according to a trader.

Against the U.S. dollar, the euro was steady at $1.2935, but within striking distance of its 2011 trough of $1.2856 hit last week.

"{The euro) ended last year on a downtrend, breaking key levels. Through much of last year, people were surprised how well it held up," said Greg Gibbs, a strategist at RBS.

"Eventually it started to fall... and that will make the market more skeptical over it and hence it's probably going to look a bit soggy at the start of the year."   Continued...