Euro recovers in Asia

The euro recouped some of its losses from the previous day ahead of a European Central Bank policy meeting later on Thursday at which the ECB is expected to lay the groundwork for a rate hike in July, with any hints on tightening possibly driving the currency through key resistance.
While traders say the view that the ECB is likely to signal rising rates has already been priced in to the euro's advance to some extent, the move could still push the currency above resistance at $1.4700, which it failed to breach on Wednesday. "The euro has been pressured by concerns over eurozone debt, so I think it would still have enough momentum to go above $1.4700 if the ECB suggests a rate hike," said Teppei Ino, currency analyst at Bank of Tokyo-Mitsubishi UFJ.
Ino added that a further break above a May 3 low of 1.4755 could help the euro climb even higher and the single currency could move closer towards resistance at its May 4 high of $1.4940. The euro last traded up 0.3 percent at $1.4625, bolstered by initial bargain hunting from model funds and speculative Asian names. Firmness in oil prices also encouraged euro-buying. It rose 0.7 percent to 117.33 yen.
The euro was also hampered by uncertainty over Greece. In a report obtained by Reuters on Wednesday, the EU, ECB and IMF mission to Greece said the next disbursement of Greek aid could not take place until it corrected the under-financing in its adjustment programme. The greenback slipped back towards a one-month low struck earlier in the week. The dollar index, a gauge of its performance against six major currencies, was down 0.2 percent at 73.812. The Federal Reserve's beige book summary of economic conditions confirmed that the economy slowed in May due to higher gasoline prices and the supply chain disruptions following Japan's earthquake and tsunami in March.
But the US currency recouped most of its losses having skidded to a one-month low around 79.693 yen the day before, as domestic and foreign brokers, as well as margin traders were detected scooping up the greenback on dips. The yen's overall weakness in crosses also supported dollar/yen, helping it climb to the session's high of 80.31 yen, alleviating immediate downside pressure but failing to break through 80.40 yen, which analysts said is now a pivot point.
The Australian dollar fell to a two-week low at $1.0563, before finding some support at $1.0590. It last traded down 0.4 percent at $1.0585 and was still weaker against all major currencies. New Zealand's central bank held rates steady on Thursday but also set the stage for higher rates, saying hikes were needed as the economy bounces back from the Christchurch earthquake. The New Zealand currency, however, relinquished most of its early gains on profit-taking to trade down 0.2 percent at $0.8194.