Euro slips in Asia

The euro fell against the dollar on Monday in the first trading session of 2011, giving back most of the gains it made late last week when it surged on short-covering in thin, year-end trade. The euro had climbed last week as euro bears gave up their positions, frustrated by the currency's firm support at its 200-day moving average just below $1.31. On Friday, its rise had gained steam after stop-loss bids were triggered.
But the euro failed to sustain its rally, weighed down by persistent worries over the eurozone's sovereign debt crisis. A story in Britain's Telegraph newspaper saying European debt markets could face another crisis in months was taken as a cue to sell the euro, market players said.
"It's nothing new, but what it does do is focus the attention back on the eurozone," said Robert Ryan, FX strategist for BNP Paribas in Singapore. Ryan, however, cautioned against reading too much into Monday's moves in the euro. "It's reasonably contained moves in illiquid markets," he said. The euro fell 0.6 percent to $1.3300, having given back the bulk of gains made on Friday, when it rose 0.8 percent.
A trader for a European bank in Singapore said there was talk on Monday of euro selling by macro hedge funds, adding that some stop-loss selling helped exacerbate the euro's decline. "The Market is very quiet with everyone on holidays," the trader added. Tokyo, Sydney and London were among the markets closed on Monday for holidays. The dollar edged up 0.2 percent against the yen to 81.28 yen, having touched an eight-week low of 80.93 yen on trading platform EBS earlier on Monday.
A drop below 80.21 yen would take the dollar to its lowest against the yen in nearly 16 years, and a drop below 79.75 yen hit in April 1995 would take the dollar to a post-World War Two record low. The US Federal Reserve's quantitative easing policy has weighed on the dollar against the yen in recent months. The dollar held steady against the Swiss franc at 0.9351 francs, having pulled up a tad from its all-time low of 0.9301 francs hit on Friday. The euro fell 0.4 percent versus the Swiss franc to 1.2445 francs, not far from the euro's record low against the franc of 1.2398 hit last week.