The euro edged up on the US dollar in holiday-thinned Asian trade on Friday, but was still on track to end the year modestly lower as the European debt crisis looks set to last for many more months. The single currency changed hands at $1.3063, from $1.3050 late in New York and well within the tight $1.3016/$1.3120 range of the past 36 hours.
Support was found around $1.3000/20 and key resistance at $1.3200, while trading is ultra-thin with Tokyo on holiday and Christmas just around the corner. Oddly, despite all the talk of crisis and failures to resolve it, the euro is only 2.4 percent lower for the year. "People are diversifying away from US dollars and that's what it comes down to," said David Scutt, a trader at Arab Bank Australia in Sydney.
The Wall Street Journal carried a story late Thursday that the Federal Reserve could commit to keeping rates near zero right out to 2014. The report claimed the Fed could announce the decision at its next policy meeting on January 24-25. Still, the euro was hovering near all-time lows against the Australian dollar on diverging economic fundamentals between Europe and Australia.
The single currency slipped to an all-time low of A$1.2838 =, for a loss of 1.8 percent on the week. It was also near a three-month low of NZ$1.6810 against the New Zealand dollar and was last at NZ$1.6841. The New Zealand dollar dipped briefly on news of another earthquake near Christchurch but soon steadied at $0.7743 =, up from $0.7724 late in New York on Thursday. Against the safe-haven Swiss franc, the euro was also struggling at 1.2211 franc, not far from the cap of 1.20 franc introduced by the Swiss National Bank in September. The dollar index inched lower 0.1 percent to 79.898, while it stayed dormant at 78.16 against the yen.
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