Euro under pressure on profit taking

TOKYO: The euro came under pressure Thursday in Asian trade on profit taking following gains made on the previous day, dealers said.

The euro stood at $1.4395 and 110.30 yen, slipping from $1.4428 and 110.45 yen in New York Wednesday.

The euro fell against the dollar and the yen as investors locked in profits, taking a cue from falling Japanese share prices, said Tokyo Forex and Ueda Harlow senior dealer Yuzo Sakai.

"The euro rose well on Wednesday, so investors are taking this chance to take profits," he told Dow Jones Newswires.

The dollar fetched 76.58 yen, little changed from 76.54 yen in New York.

Investors also stayed cautious over a possible Japanese forex intervention after Finance Minister Yoshihiko Noda said he was watching the market "carefully".

But the market largely remained quiet with many dealers away on summer holidays.

The euro maintained ground it had regained against the Swiss franc after falling on Wednesday despite a statement from the Swiss National Bank on measures to cap the safe-haven franc's strength.

Analysts said markets were underwhelmed by the SNB's decision to expand sight deposits, or funds that commercial banks can withdraw without notice, from 120 billion to 200 billion francs.

The franc "shot up after the Swiss National Bank didn't announce a peg to the euro to weaken it, despite speculation of such a step," noted John Kyriakopoulos of National Australia Bank.

However, he added: "In our view this is a slow burner".

The euro fetched 1.1374 Swiss francs, off from 1.1400 after falling to as low as 1.1224 Wednesday. The dollar stood at 0.7900 franc from 0.7897.

"A damp squib," David Watt, senior currency strategist at RBC Dominion Securities, said in a note. "The SNB seems determined to try to turn the franc from safe-haven into a funding currency again, but they don't seem particularly eager to take some of the more extreme options available."

Copyright AFP (Agence France-Presse), 2011