TOKYO: The euro was weaker in Asian trade Wednesday, with markets cautious ahead of a European Central Bank meeting that dealers expect will see more crisis-fighting measures for the debt-hit continent.
The single currency bought $1.2529 and 98.36 yen in Tokyo afternoon trade, from $1.2564 and 98.51 yen in New York late Tuesday. The dollar was little changed at 78.37 yen against 78.40 yen in New York, even as poor manufacturing data hinted at further slowing in the US economy.
The euro backed off its Monday highs which were sparked by the European central bank's chief Mario Draghi signalling it may restart the purchase of bonds issued by troubled eurozone nations such as Italy and Spain in a bid to lower their public borrowing costs. Critics led by Germany have warned the move would let troubled nations avoid painful austerity cuts crucial to repairing their fiscal health. "If the announcement is delayed, it would pose a risk of worsening market sentiment greatly," Hiromichi Shirakawa, analyst at Credit Suisse in Tokyo, said in a note.
Another possibility is an interest rate cut by the bank to a record low of 0.50 percent, a move likely to pressure the euro, Shirakawa told Dow Jones Newswires.
Questions about the ECB's plans come amid growing concerns about the state of the global economy and Moody's lowering its rating outlook on the European Union to negative from stable.
Poor August manufacturing data for the United States and China, the world's top two economies, have also added to the gloom, and raised the likelihood of further easing measures in the US and Europe.
On Wednesday, the dollar was higher against other Asia-Pacific currencies.
It rose to Sg$1.2480 from Sg$1.2442 on Tuesday, to 31.24 Thai baht from 31.19 baht, to 9,586 Indonesian rupiah from 9,575 rupiah, to 41.95 Philippine pesos from 41.87 pesos and to Tw$29.84 from Tw$29.82.
The greenback rose to 55.88 Indian rupees from 55.44 rupees and to 1,135.68 South Korean won from 1,131.55 won. China's yuan bought 12.31 yen against 12.33 yen, while the Australian dollar weakened to $1.0191 from 1.0270 after the release of economic growth data that came in below market expectations.
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