Euro steadies in Asia

The euro held steady on Thursday, but still hovered near an 11-month low hit the previous day as signs the European debt crisis was far from over prompted investors to sell risky assets and bolstered demand for the dollar. The euro was little changed at $1.2986 after having fallen to as low as $1.2945 on Wednesday, the lowest level since January 11, on trading platform EBS. The next major support is found at the year's low, $1.2860 on January 10.
The euro inched up 0.1 percent against the yen to 101.38 yen. On Wednesday, the euro had dipped to as low as 101.10 yen, nearing a 10-year low of 100.77 yen hit in October. The single currency has come under pressure this week after last Friday's European Union summit, seen as critical to reach a solution to rein in the debt crisis, failed to restore investor confidence. The euro's weakness, plus falls in commodities such as gold and persistent strains in dollar funding markets, have bolstered the US dollar this week and has helped lift the dollar index close to its 2011 high.
With the European Central Bank sounding reluctant about stepping up its bond-buying programme, any bounce in the euro is likely to be limited in the near-term, said Rob Ryan, FX strategist at BNP Paribas in Singapore. "We need something to get us through the next six to 12 months," Ryan said.
The euro area faces the next potential crunch point in mid-January when Italy has to start issuing tens of billions of euros in bonds towards a 2012 total of 340 billion euros needed to roll over maturing debt. The dollar index last stood at 80.565, having hit an 11-month high of 80.73 on Wednesday and nearing the 2011 peak of 81.313.
The dollar index has risen above resistance at the top of the weekly Ichimoku cloud this week, possibly setting itself up for more gains. The Ichimoku chart is a technical analysis tool that is popular among traders. The Swiss franc dipped to a 10-month low of 0.9549 to the dollar on Thursday, ahead of a central bank policy meeting later in the day. The dollar held steady against the yen at 78.08 yen.