Euro steadies in Asia

The euro steadied against the dollar on Monday as moves to exit riskier positions tapered off, although market players remained wary of the risk that unrest in Egypt could spread across the Middle East. The Australian dollar also pared its earlier losses, supported by renewed gains in commodities.
However, as street protests in Cairo showed no sign of abating, investors remain worried that political upheaval could hit other Arab countries, potentially disrupting oil production and heightening diplomatic tensions in the region. "This will not be limited to Tunisia and Egypt. This could spread to other countries, which could make the whole Middle East unstable," said Mitsuru Saito, chief economist at Tokai Tokyo Securities.
The euro was little changed from late US trade on Friday at $1.3615, after bouncing from an intraday low of $1.3570 hit on trading platform EBS. The high-yielding and commodities-linked Australian dollar was steady at $0.9944, well above its intraday low of $0.9866. The Australian dollar had dipped close to support at $0.9860, the base of the daily Ichimoku cloud and also at around $0.9855, its 100-day moving average, before bouncing back.
"Any worsening in fears over stability in the Middle East would further dampen risk appetite, providing support for safe haven currencies like the US dollar, Swiss franc and yen," said Bank of New Zealand currency strategist Mike Jones. Egyptian protesters were camped out in central Cairo on Monday and vowed to stay until they had toppled President Hosni Mubarak.
The dollar dipped 0.2 percent against the yen to 81.97 yen and dipped 0.1 percent against the Swiss franc to 0.9410 franc. Market players are also aware that selling in some emerging market bonds could escalate to a self-feeding spiral, much like in 2008, when investors had to sell many risky assets to cover losses elsewhere. The Egyptian crisis is seen as having the potential to overshadow broader and more fundamental economic events this week, which include a slew of economic data such as US non-farm payrolls and central bank decisions.